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Copper: opportunities for decarbonization

Copper concentrates the greatest opportunities due to the increase in the demand for minerals for decarbonization, according to a report by the Inter-American Development Bank (IDB).

In particular, copper accounts for the majority of the total benefits: 86% of the total, that is, 43,000 million dollars.

Today, copper already accounts for most of the profits from mineral production in the countries most relevant to the focus metals: Argentina, Bolivia, Brazil, Chile, Mexico and Peru.

As the demand for copper increases along with the growing market shares of the focus countries, their profits from copper production continue to rise.

According to the same report, between 2020 and 2050, profits from lithium will grow more than 10 times to almost 1,000 million.

Desglose del excedente del productor por mineral y por país en 2020 y 2050 en el escenario de 1.5 °C

This is due to the fact that lithium has a higher production growth rate and higher profit margin than other minerals.

However, with only 2% of total mineral earnings, the lithium market is still much smaller than copper, as copper is produced in much larger volumes.

Chile has the highest absolute annual profit ($28 billion) of all countries in 2050 resulting mainly from copper, while Argentina has the highest annual growth rate (5.2%) in profit between 2020 and 2050.

Copper

The IDB document indicates that climate change brings great challenges, but also great opportunities from which Latin America and the Caribbean can benefit.

To avoid the enormous negative impacts of climate change, it is necessary to reduce greenhouse gas (GHG) emissions, limiting the increase in the planet’s temperature to 1.5°C.

The research concludes that there is an economic opportunity for Latin America and the Caribbean (LAC) estimated at 50,000 million dollars per year in 2050 (equivalent to the gross domestic product [nominal of Uruguay in 2020) due to the increase in the demand for minerals for the decarbonization

This economic benefit highlights the opportunity for the region to take advantage of its mineral reserves for decarbonization and, at the same time, limit the increase in global temperature to 1.5 °C.

Copper, lithium, manganese, lead and zinc are defined as the focus minerals given their relevance in decarbonization and in the LAC region.

These minerals are part of technologies related to decarbonization such as electric vehicles, renewable energy, electrical systems and carbon capture and storage technology.

 

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