reSee.it Video Transcript AI Summary
Copper and aluminum are the primary beneficiaries of the grid spending increase. $800,000,000,000 is going to buy copper, which is money. How big is the oil market compared to the metals market? Crude oil dominates. All metals—iron ore, gold, copper, aluminum, nickel—are thinly traded and critical. There is no chance to get off crude oil; you can’t build electric cars, windmills, solar, or a modern military without these metals. Underwater power cables are expensive, and offshore wind with transmission to Greening efforts illustrates copper’s central role.
Copper is the focus: copper is the expected $270,000,000,000 per year market by tomorrow morning. Where will this metal come from? There is no copper inventory. Historically, since Mohenjo Daro, humanity mined 700,000,000 metric tons of copper; about 80% of all copper ever mined is still in human possession. Recycling can recover about 80% of that 700,000,000 tons, but to do so would require tearing down every building in the United States, Europe, Japan, and China. Copper is embedded in buildings and other infrastructure; it can be recycled, but extracting it at scale remains challenging.
Currently, we consume 30,000,000 tons of copper a year, with only 4,000,000 tons recycled. To maintain global 3% GDP growth, without electrification and relying on burning oil and gas, we must mine the same amount of copper in the next eighteen years as we mined in the last ten thousand years. In the next eighteen years, we would have to mine the same cumulative amount as in ten thousand years prior, without electrification, without data centers, without solar and wind, and without the greening of the world economy. There is little appreciation for the challenge faced.
Since 1900, the energy required to produce copper has increased 16-fold. As ore grades decline, more energy is needed to produce the same metal, while water consumption has doubled. The easy copper deposits are largely depleted; Chile accounts for 24% of global copper mine production, but costs are in the third or fourth quartile. Chile burns coal, and solar isn’t reliable for mining operations since the sun shines only ~five hours a day; solar is useless without grid-scale storage. We are heading for a train wreck in Chile. To meet copper demand, six giant Tier One mines must come online every year from now until 2050.
To meet copper demand, 40% of production must come from new mines for electrification, data centers, and grid upgrades. All the talk about AI is fantasy without sufficient energy. Nuclear power could help, but its components require metals, and the U.S. lacks the capability to weld containment vessels in traditional nuclear plants; Korea can build a nuclear power plant.