The global copper shortage is poised to intensify dramatically as artificial intelligence infrastructure drives demand for the critical metal up by as much as 72% over the coming decades, according to mining giant BHP. The company’s Chief Financial Officer Vandita Pant revealed to the Financial Times that AI data centers will account for 6% to 7% of total copper demand by 2050, a massive increase from less than 1% currently.
BHP projects that global copper demand will surge to 52.5 million tons annually by mid-century, compared to just 30.4 million tons in 2021. This exponential growth is driven primarily by the rapid expansion of AI infrastructure, as copper is essential for electrifying the massive data centers required to run AI systems. The power-intensive chips that enable AI technology further compound the demand for electrical infrastructure and copper wiring.
The copper market is already experiencing severe supply constraints. Global copper inventory hit its lowest levels since 2008 last year, with existing mining projects struggling to meet current demand. The situation is exacerbated by the lengthy timeline required to bring new copper mines online—typically 15 years from discovery to production. This supply-demand imbalance caused copper prices to reach record highs in May, though China’s economic slowdown has temporarily deflated prices to $9,207 per ton.
Industry analysts predict dramatic price increases ahead. Some experts forecast copper could rise to $15,000 to $40,000 per ton as the shortage becomes more acute. Bank of America projects copper prices could hit $5.44 per pound by 2026, representing a 27% increase from current levels, driven largely by AI data center expansion.
The mining industry is responding through consolidation and strategic acquisitions. BHP partnered with Lundin Mining in July to acquire exploration firm Filo for $3 billion, aiming to boost future copper output. Bank of America estimates that an additional 18 to 28 gigawatts of electric capacity will be needed by 2026 to support the growing AI infrastructure, all of which requires substantial copper for electrical systems and power distribution.
Key Quotes
AI data centers will account for 6% to 7% of copper demand by 2050.
BHP Chief Financial Officer Vandita Pant told the Financial Times this projection, highlighting how AI infrastructure will transform from less than 1% of current copper demand to a major consumer of the metal within three decades.
Global demand for copper to rise 52.5 million tons a year by the mid-century, compared to 30.4 million tons in 2021.
This BHP projection illustrates the massive scale of copper demand growth expected over the coming decades, with AI data centers being a primary driver of this nearly doubling of consumption.
Our Take
This story reveals a fascinating intersection between cutting-edge AI technology and centuries-old commodity markets. While much attention focuses on semiconductors and software, the physical infrastructure supporting AI—particularly electrical systems requiring copper—may become the real bottleneck. The 15-year timeline to open new mines creates a structural mismatch with the rapid pace of AI development, potentially creating a supply crisis that could slow AI deployment or dramatically increase costs. The mining industry’s turn to M&A activity suggests companies recognize this opportunity, but it also indicates existing capacity is insufficient. Tech companies racing to build AI infrastructure may need to think more strategically about securing copper supplies, potentially through long-term contracts or even direct investments in mining operations. This commodity crunch could reshape competitive dynamics in AI, favoring companies with better supply chain planning and resource access.
Why This Matters
This story highlights a critical infrastructure bottleneck that could constrain AI development and significantly impact the technology sector’s growth trajectory. As AI systems become more sophisticated and widespread, the physical infrastructure required to support them—particularly copper for electrical systems—is emerging as a potential limiting factor.
The 72% projected increase in copper demand from AI data centers represents a fundamental shift in commodity markets and industrial planning. Companies investing billions in AI development may face unexpected costs and delays if copper shortages drive prices to the $15,000-$40,000 range predicted by analysts. This could affect everything from the pace of AI deployment to the profitability of tech companies building massive data center networks.
The 15-year timeline to open new copper mines means decisions made today will determine AI infrastructure capacity in the 2040s. This creates urgency for both mining companies and tech firms to plan strategically. The situation also underscores how AI’s impact extends far beyond software and chips, creating ripple effects across traditional industries and commodity markets that will shape the technology’s evolution for decades to come.
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