The Copper Supply Problem No One Can Fix in Time

Copper is facing a hidden supply issue that's presenting both a problem and a strategic opportunity

“Humanity needs to mine about as much copper in the next 20 to 25 years as we’ve mined in the last 10,000 years.”

Those are the words of Robert Friedland, the billionaire founder and executive co-chairman of Ivanhoe Mines, and one of the most successful mine-builders of his generation. It’s a striking claim. It also happens to be backed up by the math.

We’ve spent a lot of time in our research talking about what’s driving copper demand, AI data centers, electric vehicles, grid modernization, defense spending and re-shored manufacturing. You may recall some of the key numbers: a single large data center can draw 40,000 to 50,000 tons of copper. An electric vehicle uses three to four times the copper of a gas car. Add it all up, and S&P Global projects demand will hit 42 million tons a year by 2040. That’s roughly 50% higher than today.

But today, we want to talk about the other side of the equation, the one that gets less attention and arguably matters more, supply. Because while the demand story is impressive, the supply conundrum is alarming.

The Pipeline Is Broken

The average time between discovering a new copper deposit and producing first metal from it is 15 to 20 years. S&P Global puts the average at 17 years. Let that sink in for a moment. Any deposit discovered today is unlikely to contribute a single pound of copper before the early 2040s.

And that would be fine if the industry had been spending money on finding new deposits all along. But that’s not the case.

Consider this. Around 2012, copper mining companies were spending roughly $120 billion a year on capital expenditures. Over the following years, the industry slashed that figure by 55 to 60%. Exploration budgets collapsed. New projects stalled. And because the lag between spending money and producing copper is measured in decades, the consequences of that underinvestment are only now starting to show up.

Here’s where those two issues meet.

To keep pace with projected demand, the world needs somewhere between one and six large new copper mines coming online every year.

Problem is, we are nowhere close to that. The pipeline of permitted, financed, construction-ready copper projects is thinner than it has been in a generation. In fact, of the 239 major copper deposits discovered since 1990, just 15 have finalized construction plans.

But even that is not the whole story. Because instead of new supply coming online, existing supply is actively going offline.

The most visible example is Cobre Panama. First Quantum’s massive copper mine in Panama was shut down in late 2023 after Panama’s Supreme Court ruled the mining contract unconstitutional. As of today, the mine remains closed. That single closure took roughly 350,000 metric tons of copper. That’s about 2% of global output, off the market indefinitely.

These problems extend to Peru and Chile, which together produce about 40% of the world’s copper, and both face mounting permitting challenges, water restrictions, community opposition, and political uncertainty. Major producers like Anglo American have already cut production guidance.

The trend is clear. The easy copper has been found, and what’s left is harder to reach, harder to permit, and more expensive to develop.

The Deficit Is Here

All of those deteriorating conditions, the broken pipeline, the collapsed investment, the mines going offline, add up to one thing – long-term structural shortfalls.

Mind you, this isn’t a limitation that will emerge in the 2030s. The deficit is happening now. And this is something the biggest names in finance agree on almost unanimously.

Goldman Sachs, where I was a Managing Director before leaving Wall Street, projects that copper supply will fall short of demand by over 500,000 metric tons this year alone.

Morgan Stanley forecasts a 600,000-ton refined deficit for 2026. That’s the largest shortfall in more than twenty years. To put that in perspective, that’s roughly 3% of annual global production missing from the market. That may not sound like much, but commodity markets run on very thin margins between supply and demand, a gap that size is more than enough to move prices. Plus, it compounds every year it isn’t closed.

JPMorgan, typically among the more conservative voices on commodities, puts the number at 330,000 tons once the copper demand from hyperscale AI buildouts is factored in.

Meanwhile, copper is trading around $6.35 a pound, just off a record high near $6.70. That price signal is telling you the market is beginning to understand what’s coming. And with mined production projected to peak around 33 million tons near the end of this decade (while demand continues rising toward 42 million tons) we expect that gap to only widen from here.

What This Means for Investors

When supply can’t keep up with demand, and new mines take nearly two decades to build, the companies that already control copper deposits in buildable jurisdictions become extraordinarily valuable.

You don’t need to look far to see that playing out.

Earlier this year, Eldorado Gold paid C$3.8 billion for Foran Mining, a copper developer advancing one of Saskatchewan’s largest base metals deposits. BHP and Lundin Mining paid C$4.1 billion for Filo Corp. Hudbay Minerals, a mid-tier copper producer, picked up Arizona Sonoran Copper at a 30% premium.

And those are just a few high-profile deals. There have been many more.

Copper was also the driving force behind $45.7 billion in base metals M&A last year. That’s up 214% from the year before, and the wave has carried into 2026.

The point is, the majors are no longer waiting for projects to reach production. They’re buying earlier, because the pipeline is so thin that waiting means missing out entirely.

In this month’s Prinsights Founders+ issue out tomorrow, we’re recommending a company we believe sits right in the path of this thesis, a copper-gold developer in one of the most buildable mining jurisdictions in North America, with infrastructure already in place and a market cap that suggests the market hasn’t caught on yet.

The full analysis, including our buy-up-to price and risk assessment is for Founders+ subscribers only. If you’re not a member yet, and you want to be ahead of the market open on this one, join here now.