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Copper prices have fallen about 20 per cent from their high point this year. That reflects the metal's oft-noted role as "Dr. Copper" - its price as
a predictor of economic slowdowns and recessions, Daniel Yergin, Vice Chairman of S&P Global said in a note.

And indeed, the IMF sees a sharp slowdown in global growth in 2022 and projects further slowing in 2023 and potential recession - as do many other forecasters. But, post-recession, the coming flood of demand from the energy transition will cause copper prices to rise again, Yergin said.

As has been the historical pattern, the surge in demand and prices will likely create new tensions between resource-holding countries and mining companies, which in turn will affect the rate of investment.

Moreover, as the race to net zero intensifies, there is a risk that the competition for minerals will become caught up in what has become known as the "great power competition" between China and the US, Yergin added.

The physical inputs that go into harnessing wind and solar power are not costless. The effort to push a significant part of the 2050 goals toward 2030 will likely have to contend with significant physical constraints. These four challenges - energy security, macroeconomic impacts, the North-South divide, and minerals - will each have significant effects on how the energy transition unfolds. None are easy to grapple with - and they will interact with each other, which will compound their impacts, he added.

The study took the types of year 2050 targets advanced by the US administration and the European Union and assessed what realising those targets would require for specific applications - for instance, the different components of an offshore wind system or electric vehicles.

An electric car, for example, will require at least two-and-a-half times more copper than a vehicle with a conventional internal combustion engine. The conclusion of this analysis is that copper demand would have to double by the mid-2030s to achieve the 2050
goals, Yergin said.

The choke point is supply. At the current rate of supply growth - which encompasses new mines, mine expansion and greater efficiency, and recycling, as well as substitution - the amount of copper available will be significantly smaller than the copper supply requirements. For instance, the IEA estimates that it takes 16 years from discovery to
first production for a new mine. Some mining companies say more than 20 years. Permits and environmental issues are major constraints around the world.

Also, copper production is more concentrated than, say, oil. Three countries produced 40 per cent of world oil in 2021 - the US, Saudi Arabia, and Russia. Just two countries produced 38 per cent of copper - Chile and Peru, Yergin added.

The global disruptions in energy markets and the war in Ukraine have added impetus to the push for renewable energy and the drive toward net-zero carbon emissions. Yet, even as the global consensus around the energy transition becomes stronger, the challenges to that transition are also becoming clearer.