Source: Streetwise Reports 08/30/2024
The new Green Economy will be fed by electricity that will surge through untold amounts of copper. It has become such a hot commodity worldwide that armed gangs in South Africa are attacking utilities in South Africa and killing security guards and heists are taking millions of dollars' worth of it in Europe and the U.S., according to reports.
On a smaller scale, thieves take the metal from wiring in abandoned buildings, air conditioners, or even manhole covers. In June in Mumbai, India, police said a gang pretending to be working for the local government dug up a road for the telephone lines underneath. It was only noticed when the utility found out hundreds of telephones were non-functioning.
"All around the world, hundreds of millions of dollars' worth of the metal has been stolen — and countless lives have been lost" Vince Beiser wrote for WIRED on August 22. "With the possible exception of gold, no other metal has caused so much death and destruction."
Copper climbed above US$5 per pound in May, based on predictions of tighter supplies and rising consumption for electric vehicles (EVs) and power grids in the transition to green energy. It was US$4.21 per pound on Thursday.
"The cost of fixing the damage often far exceeds the value of the stolen metal" Beiser wrote of thefts. "Ripped-out cables have shut down drinking water supplies in Hawaii, streetlights in Missouri, airport runway lights in Washington, and whole subway lines in New York City. The U.S. Department of Energy has estimated that copper theft causes US$1 billion worth of damage every year to facilities and businesses considered critical infrastructure."
Construction Mafias
Major thefts in the West have included US$200 million worth of the metal stolen from Aurubis, Europe's largest producer, and a ring in the U.S. shut down by police in 2013 that lifted as much as US$80 million worth of copper ingots from an Arizona mine, Beiser reported. An inside job, workers in on the scheme would open the gates for thieves' trucks to drive in and load up.
"My memory of this industry goes back quite a long way, and I can't recall any similar incidents on this kind of scale" Michael Lion, who's been involved in the recycling industry for more than 50 years and is one of its most well-known figures, told Mining.com about the Aiurubis thefts for a 2023 article. "The very substantial sums of money involved suggest that this was an extremely well-organized operation that could well have involved a web of conspiring suppliers."
But most thieves in America are "opportunists" Beiser wrote. "The booty includes fire hydrants, a 3,000-ton bell, a bust of Orville Wright, and at least one urn containing human ashes."
Also in South Africa, mining companies have faced so-called "construction mafias" in which organized crime gangs seek to "extort procurement contracts from mining companies, through threats of violence, or actual violence" Rebecca Campbell wrote in February for Creamer Media's Mining Weekly.
"One of the most shocking experiences was that of Richards Bay Minerals (RBM), where two company GMs have been assassinated since 2016, over procurement contracts" Campbell wrote.
Desperate 'Zama Zamas' Risk Lives Underground
Another problem faced by South African company Anglo American Platinum Ltd. has been copper theft on a micro level. "This has been both a direct problem — the theft of copper cabling from the company's own properties — and an indirect problem (the theft of copper cabling from Transnet's railway lines, immobilizing the trains carrying the miner's output)" Campbell noted.
"Tactics used by these gangs included so-called 'community blockages,' preventing access to, or egress from, mines, thereby disrupting production and delivery" she noted.
Poverty, ineffective policing, and rising metal prices have turned copper theft into a major industry in South Africa, Beiser wrote in WIRED.
"Mines are rich targets, even those that don't extract copper" he wrote. "Their subterranean networks of shafts and tunnels need power to run lights and digging equipment. That power, of course, is carried by miles of electric cable, conveniently left unguarded and out of sight."
He said hundreds of desperate people known as zama zamas—roughly meaning "take a chance" in Zulu, are risking their lives to get the metal.
"These illegal miners clamber down mine shafts on ropes or handmade ladders, then make their way into the tunnels" he wrote. "There, they set up underground camps. Hundreds of zama zamas may be living underground at any given time, some spending weeks or even months down in the tunnels."
The Catalyst: 'Electrify Everything'
Why is this metal so important? According to Beiser, the "battle cry of the energy transition is 'Electrify everything.'" That translates into a lot of copper, which is the best natural conductor of electricity outside of the much rarer silver. It's needed for everything from batteries to solar panels. Electric vehicles contain as much as 175 pounds of copper. Power-hungry artificial intelligence (AI) is also expected to put a squeeze on electricity demand.
"We need it to massively expand and upgrade the countless miles of power cables that undergird the energy grid in practically every country" the author wrote. "In the United States, the capacity of the electric grid will have to grow as much as threefold to meet the expected demand."
According to Credendo, demand for copper could double by 2035. New copper production — and investment in exploration — will be needed to fuel the supply of those vehicles in the long term, analysts have said.
The hunt for copper "has been accelerating, as companies involved in all parts of the copper supply chain realize the structural supply deficit facing the copper market" wrote Rick ...
