Providing copper to global manufacturers of plug-in electrified vehicles is exciting for the world’s largest mining company.
That massive mining company, Australia-based BHP Billiton, has become increasingly optimistic that there will be a surge in demand for some of the metals and minerals it mines, especially copper, as demand for PEVs and other renewable energy technologies grow. Its products include metals and coal used for both steelmaking and fueling power plants.
“As you see more renewables and EVs, we also will see an impact on copper demand,” Fiona Wild, BHP’s vice president, sustainability and climate change, said today at a conference in Shanghai hosted by Bloomberg New Energy Finance. “EVs at the moment have about 80 kilograms of copper in them. As they become more efficient, you see a greater amount of copper in those vehicles, so there’s always upside for copper.”
BHP Billiton sees itself being well positioned, as copper plays an important part of wiring systems used in PEVs. Bloomberg New Energy Finance expects the number of PEVs on roads around the world to more than double in the next four years – up to about 2.2 million from the one million sold between 2010 and 2015. That will come from regulatory mandates in important auto markets including the U.S., China, and Europe, according to BNEF.
Copper accounts for 27 percent of BHP’s commodity sales, second after iron ore at 34 percent, according to the company website.
“As a powerful offset to substitution, copper is superbly placed to benefit from expanded end use demand on the back of observed trends in technology, which we expect will become material from around the middle 2020s,” Vicky Binns, vice president, marketing minerals, wrote on BHP Billiton’s website on Oct. 31.
As a supplier of coal to electric power plants around the world, BHP Billiton finds itself facing challenges coming from government climate change policies and growing demand for renewable energy such as wind and solar. It’s similar to what oil and gas companies face, and which motivated 10 oil companies to release a statement in support of United Nations climate change goals last year.
The Paris climate accord negotiated last year is “more substantial and ambitious,” than expected, BHP said in a statement earlier this month.
“People often think of energy challenges in terms of coal and oil and gas,” BHP’s Wild said. “But it’s much broader than that.”
Providing copper for electric cars can help offset coal, with China being a key market for BHP. Demand for metals in lightweight transportation and new energy vehicles is part of a “new normal” for metals as the economy slows, according to a Chinese ministry. The country became the world’s biggest copper consumer amid a construction boom and build-up of the electricity grid.
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BHP Billiton has been supporting greenhouse gas emissions reductions for several years, according to a company report from last year. The Australian company has invested several hundreds of millions of dollars since 2007 in the research and development of technologies to reduce greenhouse gases, including carbon capture.
Like copper, these technologies could become a vital profit center for the company. Technology that reduces greenhouse gases would catch these gases from fossil-fuel plants and could become commercially viable in the next 15 to 25 years depending on government policies, according to the company report.