The world may still be figuring out how important Artificial Intelligence will ultimately be, but it’s already a big deal for copper according to BHP.
The world’s biggest miner has just said they see Artificial Intelligence—or AI—boosting demand for the red metal by as much as 72% in the coming decades.
AI data centres will, says BHP, account for 6% to 7% of copper demand by 2050, up from less than 1% today, meaning global demand for copper will jump to 52.5M tons a year by the mid-century, compared to 30.4M tons in 2021.
The big reason is that the chips that power AI are massively power-intensive, with the International Energy Agency—IEA—predicting that electricity consumption from data centres, AI, and the cryptocurrency sector could double by 2026. A level of electricity consumption equivalent to Japan’s.
The recent BHP comment is sure to add to already robust global speculation about copper demand and supply. For months now market analysts & research companies have been predicting a world copper deficit. What is still unknown is how big that demand will be
Global inventory hit its lowest level since 2008 last year with existing projects failing to keep up with demand. Meanwhile, new mines are not coming online fast enough with a recent report saying they can take over 20 years to go from discovery to production.
The IEA has added that the world will need to address strained electrical power grids if the demand on them keeps rising. Grid upgrades, however, also require copper, particularly from renewable energy solutions.
As one analyst pointed out “wherever there is economic development…….there is significant growth in copper consumption.”