Copper and the wild ride to the net zero brick wall

The Titanic

During its inaugural journey on April 15, 1912, the Titanic collided with an iceberg, leading to its subsequent sinking in the icy waters of the North Atlantic. Tragically, over 1,500 passengers lost their lives in this devastating event. Captain Edward John Smith had received prior warnings about the presence of icebergs, yet regrettably, he failed to respond adequately

Challenger space shuttle

The launch of the Challenger space shuttle on January 28, 1986, marked a tragic chapter in space exploration. Just 73 seconds after liftoff, the Challenger met a devastating fate as it erupted in flames, resulting in the loss of all seven crew members. In the aftermath, it was revealed that the Launch Director had not been informed about known problems prior to the launch, exposing a critical breakdown in communication and oversight.

The Fukushima Daiichi nuclear plant

In March 2011, Japan experienced a devastating natural disaster that forever altered the lives of its people. A massive 9.0 magnitude earthquake triggered a powerful tsunami along the coastline, which had a catastrophic impact on the Fukushima Daiichi nuclear plant. The destructive force of the tsunami swept away 12 out of the 13 backup generators, leaving the nuclear reactors without the vital cooling mechanisms they required. As a result, the reactors started to experience a meltdown, escalating the gravity of the situation. The human toll was immense, with approximately 20,000 lives lost and a staggering 150,000 individuals forced to evacuate from the affected areas. In the aftermath it was discovered that the owners of the plant had been warned about necessary safety changes but neglected to implement them.

The Decline of South Africa (hypothetical outcome)

In the year 2020, South Africa made a commitment to reach a net zero target. However, while the country discovered substantial gas deposits for green power generation, a new challenge emerged-insufficient copper reserves for power distribution. Instead of addressing this issue, the tolerance for copper theft increased, leading to devastating consequences for the electrical infrastructure. The country experienced frequent power outages, known as load shedding, which further exacerbated loss of production, hampered service provision and inflamed social unrest. Inevitably, these circumstances culminated in a regime change.
Note: This is a hypothetical outcome

We have a chance to avert disaster in South Africa. This is our warning.

The move to net zero

"There can be no move to net zero without copper"
Goldman Sachs

Net Zero, a global initiative, aims to achieve a delicate balance between greenhouse gas emissions produced and greenhouse gases removed from the atmosphere. In this pursuit, copper plays a vital role as a pathway to achieving net zero targets. The transition towards net zero will have a profound impact on the copper market. As a consequence of the growing demand, copper prices are anticipated to rise significantly. Goldman Sachs projects that copper prices could reach as high as $15,000 per ton by 2025.

137 Countries have committed to achieving net zero, signaling a substantial increase in demand for copper. It is estimated that green-related copper demand will surge by a remarkable 540% by 2030. However, this surge in demand is likely to outpace the supply, leading to a scenario where copper becomes increasingly sought after. As the world moves towards cleaner and more sustainable practices, copper is set to play a crucial role in meeting the rising demand, reinforcing its status as a valuable resource in the journey towards a net-zero future.

The Bottom Line

A total of 137 countries have made firm commitments to achieving net zero emissions, acknowledging the critical importance of this goal. However, it is crucial to recognize that the path to net zero cannot be successfully navigated without the essential contribution of copper.

As a result, a surge in demand for copper is expected to unfold, driven by the requirements of all 137 countries committed to net zero. This heightened demand will inevitably lead to fierce competition among nations for adequate copper supplies. Unfortunately, the copper market finds itself ill-prepared for the magnitude of this pivotal role it must play.

Why more copper will be needed

Firstly, the rise of green cars necessitates a higher usage of copper due to its electrical conductivity properties. Hybrid cars use 2x as much as internal combustion cars and electric cars 3x as much. Additionally, the infrastructure for electric vehicle charging relies heavily on copper components. Moreover, green energy generation from sources such as solar, wind, hydro, nuclear, and even natural gas requires a substantial amount of copper. Natural gas uses 4x more than coal plants, winde generator 7x as much and solar power plants use 9x as much.

In South Africa, where there is an abundance of 60 trillion cubic feet (tcf) of gas reserves, it is estimated that 24 tcf of gas could generate 50% of the nation's power needs for the next two decades - but without an adequate supply of copper, these efforts to transition towards cleaner energy sources will not materialise.

Where will we get the copper?

Securing an adequate supply of copper poses a significant challenge as we assess the available sources. South Africa needs a staggering 463,000 metric tons per year, yet our domestic mining efforts yield a mere 40,281 metric tons, which accounts for less than 10% of what we require. In an attempt to bridge the gap, we rely on recycling, where approximately 160,000 metric tons of copper are reclaimed annually from both junk and stolen sources.

Additionally, we depend on copper imports from countries like Botswana, Zambia, Zimbabwe, Brazil, and Namibia. However, it is important to acknowledge that we will face intense competition from 136 other prosperous nations seeking to procure copper from these very same countries. The competitive nature of the global copper market places us in a position where securing sufficient copper resources becomes a challenging task.

We will have to compete with 136 other wealthy countries to buy copper from the countries we import from.

While we move to net zero we will have to:

Firstly, it is imperative to tackle the escalating issue of copper theft, which threatens to impede progress. The higher demand for copper in the transition to net zero will drive up prices and intensify the competition for limited supply, making theft even more prevalent.
Another pressing concern is the urgent need to rebuild the decimated electrical infrastructure, which has suffered significant damage. The restoration process is essential to ensure a reliable and resilient power supply for the nation.
Furthermore, a delicate balancing act is required to manage reduced national production while contending with load shedding, which not only disrupts daily life but also results in substantial economic losses of approximately R1 billion per day.
South Africa's financial landscape presents its own set of challenges, with a debt-to-GDP ratio projected to reach 70% in 2023 and potentially rising to 84% by 2027. This necessitates prudent financial management to maintain stability and ensure the country's long-term sustainability.
The commitment to reduce greenhouse gas emissions remains a critical priority despite these challenges. Efforts must be made to find innovative solutions and implement sustainable practices to meet environmental targets.
Compounding these issues is the anticipated decline in tax income due to reduced production, posing additional hurdles for the economy and fiscal stability.
Lastly, unemployment presents a significant concern, with projections estimating a loss of 650,000 jobs by 2022, which could rise to 850,000 according to Minister Romokgopa. Addressing this issue is crucial for the well-being and livelihoods of South Africans.
The survival of South Africa depends on effectively navigating and resolving these complex challenges. It will require strategic planning, collaboration, and a resolute commitment to overcome adversity while remaining steadfast in achieving net zero and securing a sustainable future

A DIRE WARNING

Failure to safeguard our copper resources will result in dire consequences for South Africa. The ramifications will be severe and far-reaching, impacting various aspects of our nation's well-being and future prospects.

Firstly, our economy will suffer greatly, leading to financial instability and a significant decline in wealth. This will have detrimental effects on the overall quality of life for the people of South Africa.

Furthermore, our electrical infrastructure will be left in ruins, rendering it unable to support the needs of our society. This will lead to increased load shedding, causing significant disruptions to daily life and hindering progress in various sectors.

Unemployment will skyrocket as industries reliant on copper struggle to survive, exacerbating the already challenging job market. The resulting increase in joblessness will have a profound impact on the livelihoods and stability of countless individuals and families.

Moreover, foreign investment in our country will dwindle significantly, as the lack of secure copper resources will make South Africa less attractive for international business ventures. This reduction in foreign investment will further impede economic growth and development.

Perhaps most alarmingly, the prospect of a green future will be lost. Without sufficient copper supplies, we will be unable to fully embrace sustainable practices and renewable energy solutions. This setback will have profound environmental consequences and hinder our efforts to combat climate change.

The absence of a secure copper supply will also fuel extreme political turmoil, as the implications of an economic downturn, unemployment, and social unrest take hold. This turmoil threatens to undermine our democratic institutions and the stability of our nation.

To ensure the future of South Africa, it is absolutely imperative that we take immediate action to protect our copper resources. This involves implementing robust measures to prevent theft, secure supply chains, and foster responsible mining practices.

The survival and prosperity of our nation hang in the balance, and safeguarding our copper is paramount to securing a brighter future for all.

PO Box 5180
Baeberton 1300
South Africa
Contact: Mitch Mitchell mitch@cabledna.com

CableDNA technology includes a unique and permanent copper identification method.
www.cabledna.com

This release was published on openPR.