Europe, Copper demand under pressure due to Green Deal

The world’s largest economies are committed to reducing carbon emissions by diminishing their reliance on fossil fuels.

They are building solar panels and wind turbines to make renewables their primary source of energy, and we can add electric cars to the list. However, all these ambitions require significant volumes of copper, a metal whose electrical conductivity makes it indispensable in the production of green technologies.

But the new green revolution, which will gain momentum in the coming years, comes amid a shortage of copper production.

Copper demand was under pressure in 2022 amid political tensions, economic slowdowns in the US and Europe and anti-Covid measures taken by China.

The red metal is now trading at around $8,300/tonne, after the price fell more than 20% from its 2022 peak in March. However, demand is set to grow in the medium term, while supply cannot keep up.

Under these conditions, Goldman Sachs analysts expect the price of copper to reach $11,000/tonne by the end of 2023.

Green technologies strain demand

The global transition to clean energy is moving fast, and as demand for green technologies grows, more and more copper is needed.

Renewable energy plants require on average 8 to 12 times more copper than fossil fuel forms of energy generation, and electric vehicles consume 3-4 times more copper than an internal combustion engine vehicle.

Current prospects for copper supply in the coming years are well below demand, as copper mines usually take more than a decade to develop, and relatively low commodity prices have discouraged investment in recent years.

“Quite frankly, this shortfall will have a dramatic impact on our ability to make the infrastructure needed for the energy transition – such as wind turbines, EVs and charging stations,” says Kate Southwell, General Counsel at Pala Investments, an investment company focused on raw materials needed to decarbonise.

“Copper cannot be easily substituted in these uses so it is highly likely to see cost increases that will ultimately be borne by consumers and OEMs.”

Since the severe financial crisis that began in 2008, many mining companies have focused their investments on short-term projects to maximise profits. Because copper prices have been relatively low, and opening new mines requires billions of dollars of upfront investment, copper mining has not been a priority, except for a few boom years in the early 2010s.

Romania, in last place in Europe in the exploitation of own resources

Romania, despite being a country with significant copper ore reserves, the largest in Europe, only makes little use of this advantage.

Canada’s Frasier Institute, recognized for its assessments of mining business opportunities around the world, showed in 2021 that out of 112 countries, Romania ranked 109th. Moreover, in terms of the exploitation of its own resources, Romania ranked last in Europe.

Currently, Romania produces around 55,000 tonnes of copper ore annually from the Rosia Poieni mine, owned by the state-owned company Cupru Min, and Baita, controlled by the British company Vast Resources.

The largest quantity, over 50,000 tonnes, is provided by Cupru Min, which holds about 60% of Romania’s reserves.

Last spring, Economy Minister Florin Spataru brought back to public attention Romania’s intention to build a copper ore processing plant after the non-ferrous metallurgy was destroyed more than 15 years ago.

However, under current conditions, the construction of a processing plant is not economically justified, given that a minimum quantity of 120,000 tonnes needs to be processed annually for such a plant to be even close to being profitable.

Another option would be to repatriate the copper resulting from refining the concentrate, experts say, but this is not being considered by the authorities.

For years, what Cupru Min extracts goes to China, and in addition to the quantities of copper that Romania’s economy loses, the other metals that result from refining the ore can also be added to the list of losses: selenium and tellurium, two vital elements for rocket engines and sub-assemblies that require materials with high temperature resistance, gold, and silver.

For example, the Phoenix Copper Smelter in Baia Mare used to produce 40,000 tonnes of copper per year, 12 tonnes of gold and 120 tonnes of silver per year, but it was all destroyed. In addition, Ampelum Zlatna used to produce 15,000 tonnes of copper per year, but this plant has also disappeared.

50,000 tons of ore for sale

Cupru Min sent its copper ore production to China in 2021 and 2022 through Trafigura Group Pte. Ltd. of Singapore, one of the world’s largest players in metals and energy trading.

For contracting the 2023 production, Cupru Min organised a new international tender in November 2022, and the opening of bids took place in mid-December last year.

The winner of the 50,000 tonnes of copper ore has not yet been announced.

Still waiting for mining to reopen

Moldomin, owner of about 30% of Romania’s copper concentrate reserves (approx. 200 million tonnes), was sold in 2021 to Turkey’s largest mining company, Eti Bakir.

But reopening mining here also raises a legislative issue. A new mining law was enacted in 2020, but although some time has passed since then, the National Agency for Mineral Resources (NAMR) has not adopted the methodological rules for its implementation. Among other things, they should also regulate the procedure for reopening closed mining operations.

Estimated shortfall of 50 million tonnes

While Romania has significant deposits but is not exploiting them to their true potential, Glencore, one of the world’s largest dealers of non-ferrous concentrates, is now looking at developing the huge El Pachon mine in Argentina.

Glencore CEO Gary Nagle forecasts a ‘huge shortfall’ of copper, which could reach a cumulative 50 million tonnes between 2022 and 2030. Even now, despite concerns about a global recession, the balance between supply and demand remains tight. Quantities of copper sold on international exchanges reach record low levels, covering only a few days of global consumption.

Large mines reduce production

According to the International Copper Study Group (ICSG), only two major copper mines have been opened between 2017 and 2021.

Currently, two greenfield projects, Kamoa Kakula in the Democratic Republic of Congo and the Quellaveco mine in Peru, are increasing production, but this growth is offset by operational problems faced by other major mines around the world.

In Chile, the world’s largest copper producer, production will fall by 5.8% in 2022, according to government estimates. Chile’s state-owned Codelco said production fell in the first nine months of 2022 and will fall further in 2023.

In December, Panama’s government ordered Canada’s First Quantum Minerals to halt operations at its Cobre Panama copper mine after it failed to agree on royalties under a new contract. Local community protests in Peru are also disrupting copper production and supplies.

Russia opens up a huge deposit

In Russia, the giant Udokan Сopper project is scheduled to start production this year, with an estimated annual extraction of 135,000 tonnes of copper ore.

With ore reserves of over 26 million tonnes, Udokan is one of the largest deposits globally. Located in Russia’s Far East, near the border with China, the deposit is ideally positioned to transport the metal to a country that accounts for more than half of the world’s copper consumption.

China, the big beneficiary of the Udokan deposit

While Europe is postponing some of its green energy projects due to economic problems caused by higher oil and gas prices, China is on track to achieve net zero emissions by 2060.

This country is already the world’s largest producer of electric vehicles, solar panels, and electric batteries. The country’s development plans include increasing renewable energy capacity and increasing the share of electric vehicles in total car sales.

These initiatives will require additional copper and the Udokan deposit is ready to meet China’s growing demand, Energy Industry Review writes.

Calcium Carbonate Industry, Reshaping the Market Growth, Serbian supplier to match European industrial demand

Serbian Belkalhan calcium carbonate mine with its 99% highest quality and deposits confirmed could push local and European pharmaceutical industry forward with competitive supply options.

Considering the fact that Serbia is at the doorstep of EU market, which has its supply chains severely disturbed, Serbian calcium carbonate supplier could match the needs of its European customers.

In the same Belkalhan calcite mine and company operations can serve as trading hub toward third markets as Serbia has several key free trade agreements with large markets.

Europe is the fastest growing region with a market demand increase of 8.4% by 2030 because of the favorable legal and regulatory environment, coupled with a coherent industrial strategy.

Calcium carbonate is a chemical compound with the formula CaCO3. It is a common substance found in rocks as the minerals calcite and aragonite (most notably as limestone, which is a type of sedimentary rock consisting mainly of calcite).

Serbian calcite deposits are confirmed with 99% of purity and whiteness which makes it a unique quality deposit in Europe, highly attractive for pharmaceutical, chemical, paper, food, wine and other industries.

The demand for precipitated calcium carbonate increased from the pharmaceutical and residential water treatment sectors of the region during the lockdowns imposed in the world to contain the spread of the coronavirus.

Pharmaceutical market calcite application remains stable high by 2040 and European market is one of the key players, including both pharma producing companies but also investors and funds.

Automotive application of calcium carbonate is the fastest growing segment with market demand increase of 7.5% by 2030 owing to the growing utilization of the product in power trains, electrical components, interior furnishes, exterior furnishes, and chassis, dominantly monitored by European customers, but also investors and funds.

One of the most significant trends in calcium carbonate technology is the development of new and improved methods for manufacturing calcium carbonate from calcite deposits. 

This has led to the production of calcium carbonate that is of a higher quality and purity than ever before. Belkalhan calcite deposits are already highest of quality with 99% of whiteness and purity which makes them perfect match for industrial application.

This has in turn allowed calcium carbonate to be used in a wider range of applications, including in the food, pharmaceutical, and cosmetic industries.

The global precipitated calcium carbonate market size is expected to reach USD 23.39 billion
by 2030, expanding at average 8% until 2040. This is attributed to the rising inclusion of the product in the automotive and pharmaceutical industries.

In addition, the rise in the standard of living along with the improvement in the hygiene standard has led to the increasing usage of tissues and packaging paper. This, in turn, is likely to positively impact the demand for the precipitated calcium carbonate market in the coming years.

The pulp & paper application continues to grow at a significant rate on the account of the
rising demand for precipitated calcium carbonate (PCC) due to its operational flexibility.

Some factors favoring the usage of the product in the paper industry are high brightness and relatively low price, and the attainment of a porous surface of the paper sheet due to the rhombohedral particle shape.

Key market players are investing in the onsite manufacturing of calcium carbonate for large- scale industries. The organizations in the sector are focused on the development of new products with various properties to cater to industry demands. Belkalhan calcite mine exploitation technology concepts are fully adjustable to customer special demands in terms of product and package.

Belkalhan calcite mine offers limestone quarries and form a high level of value chain integration by supplying natural & unprocessed limestone, processing the raw materials according to customer’s demand, and distributing the product.

Belkalhan is the Serbian based mining exploitation company focused on graphite and calcite. The company aims to utilise unique quality of raw materials for application in industry high tech products like batteries, pharmaceuticals and chemicals.

Having all exploitation permits secured and underground mine technology developed, Belkalhan aims to support overall economy transformation. R&D center for high tech critical raw materials supply remains primarily goal in which we seek reliable, institutional partner investor.

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