Copper is Having a Moment

In 2021, New York state closed the Indian Point nuclear power plant after 59 years of operation. The plant consisted of three units. Units one and two retired earlier. However, Unit three occurred earlier than planned.

Unit 3 was a major power producer. It generated over one gigawatt of electrical generation capacity.

That’s because its operator, Entergy, couldn’t get its operating license renewed. The company applied for a 20-year license renewal in 2007. The state of New York objected to renewing the license because of environmental and safety concerns. The fight lasted for fourteen years, before Entergy turned off the lights.

To replace the lost electricity, three natural gas power plants came online. In hindsight, this was a huge mistake. Grant Dever authored a white paper in 2024 titled: Autopsy of a Perfect Policy Failure: The Closure of Indian Point.

He makes several important points about the change in makeup of New York’s power supplies. Natural gas power jumped from 39% to 50%. The issue with natural gas is the price volatility.
The Indian Point closure coincided with the Russian invasion of Ukraine. That sent natural gas prices to 15-year highs:

And there are some fundamental shifts in the copper business right now. The largest indicator is the lack of concentrate going to smelters. Concentrate is the material that miners ship from their mines. It’s a mixture of metals that go to giant industrial smelters (usually in China) to become pure copper.

According to JP Morgan’s Gregory Shearer, copper demand growth will be around 1.9% in 2025, down from 2.9% in earlier estimates. That’s due to tariffs and the disruption of global trade.

We do believe copper prices are susceptible to more disruption. The price fell 11% after the announcement of the massive U.S. tariff plan. However, the price recovered and continues to hover around all-time highs.

That’s a short-term risk. The long-term numbers remain bullish. Both The Week and the International Energy Agency (IEA) project that mines will only meet about 80% global copper demand by 2030.
Mining giant BHP has a simple chart of copper demand:

The company believes that copper demand from traditional economic growth will decline from 92% today to 71% in 2050. Energy Transition demand will grow from 7% today to 23% in 2050. And Digital demand will soar from 1% today to 6%.

We remain excited about copper. If electricity is the future for power, it is the new oil. While you can substitute aluminum to transport electricity, you can’t build electric motors with it. Copper is the metal of electrification. And that is the future of energy.

We will use any pullback in the copper price as a buying opportunity. We believe that investments today will do well over the next three to five years. That’s the period that India has for its investments in African exploration.

For the Good,

The Mangrove Investor Team

Numbers You Need to Know

70%

Around 70% of copper is used in electrical applications, including wiring, motors, and power generation. (CuSP)

100%

Around 70% of copper is used in electrical applications, including wiring, motors, and power generation. (CuSP)

700

Roughly 700 million metric tons of copper have been produced around the world. This would fit into a cube measuring about 430 meters on a side. (U.S. Geological Survey)

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