A copper boom in the United States that is expected to see four new projects open by 2020 and see host of expansions be completed has attracted more than $1.1 billion in investments from small and large miners. Driving the boom, in part, is demand for copper from Telsa and other car makers.
Electric vehicles use about twice as much copper ad internal combustion engines and the United States is home to the fifth-largest copper reserves, according to the U.S. Geological Survey (USGS). The U.S. is also a politically stable region and much of the copper in located in Nevada, one of the most mining-friendly regions in the United States.
“Fifteen years ago, U.S. mining was thought to be a dead industry, but now it's a profitable area for us,” Richard Adkerson, chief executive of Freeport-McMoran Inc told Reuters.
Freeport-McMoRan is set to open a $850 million expansion of one of its Arizona copper mines next year.
“The U.S. is really the core for our future growth,” Adkerson said. The U.S. is home to half of Freeport's reserves.
The buildouts are expected to boost U.S. copper production by at least 8 percent in the next four years, according to data from the International Copper Study Group and DBS, with Nevada Copper Corp , Taseko Mines Ltd , THEMAC Resources Group Ltd and Excelsior Mining Corp aiming to open copper mines by the end of 2020.
The development trend has gone largely under the radar, with copper industry customers like Tesla Inc - rather than miners themselves - grabbing the headlines. But that is slowly changing.
The prospect of a copper boom in the U.S., where the Trump administration is pushing for mining permit approvals to be approved five times faster and where resource nationalism fears are largely absent, is starting to draw major institutional investors.
“The copper industry needs areas of good supply with low political risk, and that's what we get in the United States,” said Stephen Gill of Switzerland-based Pala Investments, Nevada Copper's largest shareholder.
Nevada Copper's Pumpkin Hollow copper project in Yerington, NV is less than 100 km (60 miles) from Tesla's massive Gigafactory, a proximity that Gill said was a key factor in Pala's investment.
The Pumpkin Hollow mine will produce more than 91 kt/a (100,000 stpy) of copper once its underground and open-pit portions fully open, which is slated to happen in phases.
Nevada Copper and other junior miners have an advantage over larger peers. Their smaller balance sheets force them to plan small copper mines, making permitting and negotiations with local residents easier.
Rio and BHP, for instance, have been trying since 2001 to open Arizona's Resolution Copper mine, one of the world's largest projects of its type.
The two are still waiting for regulatory clearance, having spent more than $1.3 billion since 2001, in a delay brought on partly by a dispute involving local American Indian tribes.
The mine is not slated to open until at least 2030. The U.S. Forest Service is expected to post a draft environmental study on the project by this summer, after which American Indian groups and others will be able to give feedback.
“I’m convinced over time there will be a global movement toward renewable energy generation and electric vehicles ... that means the world will need our U.S. copper,” said Freeport CEO Adkerson.