“Why Copper?”: Exploring copper fundamentals at London Mining Indaba 2025

Participating in the panel discussion “Why Copper” alongside Vedanta Base Metals CEO, Chris Griffith, and First Quantum Minerals CEO, Tristan Pascall, Anglo American’s Group Head of Strategy, Paul Gait, underscored the burgeoning demand for the red metal in bridging the development gap that currently exists between the developing and the developed world.

“15% of the global population has for the last 200 years or more, accumulated 80% to 90% of the output of all raw materials, embedded them in the physical capital of their countries, and have seen prodigious growth,” said Paul.

“When we talk about some of the challenges around decarbonisation and AI, all of which are incredibly important, we have to put that in the context of this – the broad development gap that currently exists between the developing and the developed world, and that any transition, whether green or otherwise, at the same time has to be equitable.”

Copper as the backbone for improving living standards

To illustrate this point, Paul explained how the installed stock of copper per person in the developing world is currently around 220 kilogrammes, while in China this number is 75 kg, and just 22 kg in other developing nations. In short, the higher the GDP per capita (as an indicator of living standards) the higher the copper demand per person.

Given the clear correlation between GDP per capita and copper demand per capita, a vast amount of copper will be required to reduce this development gap – not least considering that GDP per capita in the developed world is nearly 4.5 times higher than in the developing world.

The supply challenge

Long-run economic data shows that over a period of 200 years, from around 1800 to 2000, the primary extractive industry’s labour productivity has increased consistently and significantly. However, in the last ^~20 years, this long-term trend has been bucked to some extent, particularly in the copper industry.

“There has been a staggering two order magnitude increase in labour intensity in the mining industry,” Paul said, “and it is that two order magnitude increase that essentially stands behind the wealth of modern industrial economies.

The problem that we have, however, is that starting from the late 1990s, there was a reversal in that otherwise 200 year continuous improvement. Productivity in the mining industry stagnated and indeed, started to move backwards.”

The reasons for this trend reversal can be attributed to a number of factors, including declining ore grades, with more energy, water, and processing to extract the same amount of product – and this is particularly true for copper. It has also become very capital intensive to develop new mines, coupled with ever more stringent operating criteria.

“What we’re seeing in the case of copper,” says Paul, “is that it’s getting harder, not easier. Mines are getting deeper faster than trucks are getting bigger.” To understand the scale and urgency of this challenge, we expect that 60 new copper mines the size of our Quellaveco operation will need to be developed by 2050 to meet forecasted global copper demand.

“Price must do the heavy lifting”

Together, with demand set to increase and supply constrained by a complex mix of challenges that have made mining more difficult, Paul suggests there is only one outcome for the copper price. “In lieu of productivity gains, price must do the heavy lifting”, says Paul. “So, for all these reasons, that’s why I’m bullish on this metal.”