A new study by S&P Global reveals that the pace of electrification is set to swell copper demand to 42 million tonnes by 2040 – representing a 50% increase from current levels.
However, there are challenges that exist. The study, Copper in the Age of AI: The Challenges of Electrification, reports that existing supply is expected to decrease in coming years as the mining sector faces challenges across the copper value chain.
Global copper production is forecast to peak in 2030 at 33 million tonnes. The widening disconnect will result in a supply deficit of 10 million tonnes by 2040 – which is 25% below the projected demand.
The gap widens further when additional areas emerge, such as the growth of artificial intelligence (AI) and data centres over recent years.
S&P Global forecasts total installed capacity for all data centres to be roughly 550 gigawatts by 2040 – more than five times what it was in 2022. Concurrently, global defence spending could double to US$6 trillion by 2040 amid increased international tensions.
Both of these vectors are expected to triple by 2040, as reported by S&P Global, representing a combined 4 million tonnes of additional demand.
A need for more copper
S&P Global says meeting this demand requires adding the equivalent of roughly 300 Hoover Dams, or more than 650 one-gigawatt nuclear reactors, each year between now and 2040.
The study reveals that demand for copper is prominent across four key vectors, two of which are core economic demand and energy transition and addition demand.
Core economic demand – construction, electrical applications, power generation, and more – constitutes the largest share of demand, totalling 23 million tonnes by 2040. S&P reports this is equivalent to 53% of the global copper demand.
Energy transition and addition demand – electric vehicles, battery storage, renewable power, and more – commands the largest amount of total growth. This vector increases by more than 7 million tonnes to 15.7 million tonnes over the same period.
Demand from just these two categories exceeds copper supply by over 7 million tonnes.
The study also found a potential fifth vector of demand, humanoid robots which are machines built in the shape of humans designed to work in human environments and use human tools.
Analysts project that there could be between 1-10 billion humanoid robots in operation by 2040 – meaning about 1.6 million tonnes of copper is required per year.
Replacing depleted resources
S&P Global notes that overcoming the supply shortfall depends on the development of new mines and the expansion of existing assets. The study estimates that an additional 10 million tonnes of primary supply is required by 2040, on top of increased recycling.
As reported on the twelfth day of Christmas, copper-focused mining companies are all thinking about supply, as Antares Metals (ASX:AM5) CEO Johan Lambrechts explained that the world has been producing large quantities of copper for several years, with roughly 700 million tonnes of copper produced to date.
“But new discoveries of large deposits have not been forthcoming to replace the depleted resources produced in the same period,” Lambrechts told this news service.
Lodestar Minerals (ASX:LSR) Executive Chairman Ross Taylor told Mining.com.au that the copper market remains structurally tight, with declining global grades and emerging supply gaps driving long-term optimism.
“Heading into 2026, the broader environment appears increasingly favourably for explorers with exposure to new discovery potential, especially those with copper-gold upside,” Taylor says.
“It is exactly the kind of market where high-quality early-stage projects can rapidly re-rate.”
According to the US Geological Survey, identified copper deposits contain an estimated 2.1 billion tonnes of additional copper, bringing the total amount of discovered copper to 2.8 billion tonnes.
For reference, this would fit into a cube measuring 680m on a side.
The US Geological Survey estimates that the undiscovered copper resource contains about 3.5 billion tonnes, which would fit into a cube measuring about 890m on a side.
In Q2 2025, copper production totalled 176,000 tonnes – representing a 21% decrease year-on-year. In the first half of 2025, copper production reached 344,000 tonnes, a cumulative year-on-year decrease of 25.7%, as reported by the Shanghai Metal Market.
Copper futures fell to around US$5.8 per pound at the time of writing, retreating from record highs and tracking a broader pullback across the metals complex as investors took profits, as reported by Trading Economics.
Over the past month, copper’s price has risen 9.37% and is up 34.21% compared to the same time last year.
Despite the critical mineral’s rise, Goldman Sachs Research expects copper prices to continue declining in 2026, even as demand for copper gradually drives prices up again.
Goldman Sachs Research forecasts the London Metal Exchange (LME) copper price to remain between US$10,00-11,000 per tonne – forecasting an average of US$10,710 in H1 2026.
Write to Aaliyah Rogan at Mining.com.au
Images: Unsplash & Antares Metals
