De-Globalisation: Can Europe supply itself with copper?

One of the oldest known copper smelters of mankind was in Tall Hujayrat al-Ghuzlan in today’s Jordan. Already 6,000 years ago, large quantities of copper were extracted from the ores of a nearby mine. The Egyptians used the metal to make weapons, tools, jewelry, and household items. Knowledge of the use of copper spread quickly. Many new applications led to copper being traded on the London and New York stock exchanges as early as the 19th century. There were also many smaller copper mines in Germany, but as early as the 1920s, before founding a trading center for copper, those responsible had to admit that one was in the “economically dependent on the large North American producers”.

Shenzhen, Yantian port

The past few months have painfully demonstrated that dependence on resources comes at a high price. But can the wheel still be turned back? So let’s take a look at the supply situation. To what extent Europe could supply itself with strategically important raw materials and what that means for industry, we want to explore with a raw materials article series.

The dependency still exists today, but the use of the metal has changed completely. Copper has very good electrical conductivity, which is why 79 percent of production ends up in this area of ​​application. Copper is required for cables to transport electricity and data in the nationwide infrastructure and inside buildings, it is in transformers, electric motors and cable harnesses. The German Raw Materials Agency expects demand to roughly double by 2035. The main drivers of this development are the expansion of the power grid, electric motors for cars, wind energy and solid-state batteries.

Germany still plays an international role in copper production and processing. 16,000 people work in this branch of industry, even if there is no longer any copper mining in this country. At the turn of the millennium, the last mines were closed, they were no longer economical. That could change: When the world market price for copper rose rapidly in 2007, the authorities in Brandenburg and in Saxony gave the go-ahead for exploring the copper deposit Spremberg-Graustein loop near the Polish border. On the Polish side, copper has been mined in Europe’s largest copper mine for years. The German portion is more than 1,000 meters deep and is estimated at 1.5 million tons of copper metal. Seen internationally, that’s not much. In 2018, more than 20 million tons were mined worldwide, with the largest Chilean mine alone producing more than one million tons per year from a low-cost open pit mine.

The production from the mines has to be processed in several steps. The rock is first ground, then chemicals separate the copper-rich ore from the rest and concentrate it into a concentrate. Some mining nations provide ores, others just the concentrate. In order to obtain pure copper, the concentrate is melted in blast furnaces and finally cleaned in electrochemical electrolysis processes. This process usually takes place in the countries that also process the copper. In 2020, Germany imported about 1.2 million tons of copper ores and concentrates and processed them into raw copper. Globally, Germany ranks fourth among the importing countries and copper producers, behind China, Japan and South Korea. The main German supplier countries were Peru, Brazil and Chile. The South American countries and Australia also have the largest deposits of raw materials. Five of the ten largest copper mines are in Chile.

The European copper balance does not turn out as badly as with other metals. Around four million tons of copper are needed across Europe, almost two thirds of which come from our own resources. At 43 percent, the recycling share from household and industrial scrap is quite high, since it can be recycled and processed into new products an infinite number of times without any loss of quality. Another 20 percent is mined in European mines. When it comes to imports, too, Europe has a certain degree of independence thanks to a large number of suppliers. Twelve percent of copper demand is imported as refined metal, 25 percent as ore or concentrate. The German company Aurubis AG is Europe’s largest copper producer and an international leader in copper recycling.

But the situation in the copper market differs significantly from other metals in one respect. China has been the driving force behind demand since 2002. In 2019, China processed 12.7 million tons of copper, just over half of global production. But the Chinese are far from being able to meet the demand from their own funding. In 2019 they had to buy more than 22 million tons of copper concentrate on the world market. That is why the European copper import ban cannot do much harm to a commodity exporter like Russia. The Russian ore is now going to China.

But China is finding it difficult to exert any major influence on the global copper market. Because the metal has long been used on an industrial scale, mining rights for the large deposits are tied to decades-long contracts, mostly held by western companies in a historically mature market. China has to buy a lot of money there or set up its own mines that extract smaller copper deposits. The country has been going both ways since the late 1990s. China has led mines to production in the African states of Congo, Zambia, South Africa and Eritrea, as well as in Laos, Myanmar, Australia and Peru. During the global financial crisis, the country took advantage of the economic problems faced by some mine operators and bought mining licenses in Peru, Afghanistan and Ecuador. With this financial support, Peru and Congo have become the world’s most important copper mining countries.

Europe still retains a large access to the mines. So far, no Chinese company has managed to join the list of the ten largest companies. They are based in Chile, Switzerland, Australia, the USA, Canada, Great Britain, Poland and Russia.

The upcoming issue of the MIT Technology Review will also deal with the topic of deglobalization. In various texts we investigate the extent to which it is possible to reverse the processes of deglobalization. The new issue is out on September 28th. can be ordered in the heise shop and from 29.9. available in the stores.

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