By Andrey Dashkov, analyst, Casey Research
Many people assume mining is a dirty industry.
That it doesn’t have many applications in the push toward clean energy.
But at Casey Research, we see this sector as necessary for countless, new-world technologies.
In fact, our own resource expert, Dave Forest, has circled the globe finding and extracting natural resources from the ground… to deliver direct insights to his readers.
If you’ve been following along in these pages, you’ll know one of the biggest trends on his radar is something called “tech metals.” In fact, several tech metals stocks in his portfolio soared as high as 241%… even 1,219%.
But if you don’t know what tech metals are, you’re not alone. A lot of folks don’t know about them… or why they’re so critical.
Tech metals are essential components for some of the most bleeding-edge trends, including electric vehicles (EVs) and wind and solar energy.
And today, I want to talk about one tech metal that I think every reader should have on their radar: copper.
Copper’s Hitting Multi-Year Highs… And That’s Just the Beginning
When you think of copper, you probably think of U.S. coins such as the dime or quarter. But copper is a key part of many household items like smartphones, TVs, fridges, microwaves, and dishwashers.
Copper is also needed in many new tech trends… including clean energy.
Dave recommended copper in the Dispatch as early as September 2020.
Since then, it’s up over 55%. Copper has been trading at its highest levels in history.
And I think this rally is just beginning…
The reason is simple: The world is transitioning to a greener economy. And it needs a lot of copper to make that happen.
It’s no secret that the world is moving away from fossil fuel-based energy systems to ones based on renewable energy.
According to the International Renewable Energy Agency, by 2050, 85% of the electricity generated globally will come from renewable sources.
Right now, clean energy produces almost 40% of total global electricity.
Coal’s share, meanwhile, is 36%.
In other words, the share of fuel-free electricity will more than double in the coming decades.
Germany, for example, aims to fulfill all its electricity needs with supplies from renewable sources by 2035.
And between 2020 and 2030, total investment in renewables will amount to about $3.4 trillion. Out of that, $2.7 trillion will go into wind and solar… which are the fastest-growing clean energy sources.
In 2021, they represented the fourth-largest source of electricity in the world.
What’s more… wind and solar are copper-hungry.
On average, there’s 12x more copper used in renewable energy systems than in traditional energy systems.
Experts predict global wind power capacity will require 5.5 million tonnes of copper by 2028. And an average solar plant has around 5.5 tons of copper per megawatt of power generation.
EVs will also drive demand for copper. The metal is used in EV batteries, wiring, and even charging stations. Plus, EVs need twice as much copper as an internal-combustion engine (ICE) or a regular fuel-powered car.
For instance, light-duty EVs with a battery capacity of up to 100 kWh can use four times as much copper as an ICE vehicle.
And by 2030, Bloomberg expects that about one-half of all car sales in major markets will be electric. But internal combustion vehicles still need copper, too.
This high demand is a bullish sign for copper. But supply isn’t keeping up…
Supply Can’t Keep Up
We’ll need enough copper to cover all this additional growth… and current uses, like traditional vehicles and everyday items.
To meet this demand, the mining industry needs to work overtime… But due to COVID restrictions and shutdowns, it hasn’t been able to.
COVID hit South American copper miners particularly hard, which drove down supply. And two of the world’s largest copper miners are in Chile and Peru.
Even if production is back on track by 2023, the reserve depletion could affect supply for decades.
And it’s not just mining. Copper inventories at metals exchanges are running at multi-month lows.
So, a decreased supply will drive up copper prices. I believe we’ll be in for a long-term bull market of historic proportions.
To profit from this opportunity, consider the United States Copper Index Fund, LP (CPER) ETF. It offers broad and convenient exposure to copper… and it closely tracks the changes in its price.
Analyst, Casey Research
P.S. If you’re interested in learning more about tech metals… and accessing resource expert Dave Forest’s picks (which include copper)… find out how to become a subscriber right here.