A global transition to clean energy sources is fueling demand for copper. The metal’s use in a variety of applications, especially given its electrical conductivity properties, is allowing companies to breathe new life into abandoned copper mines.
As reported by Reuters, “a range of companies are firing up abandoned assets once seen as financial liabilities to fast-track significant volumes of supply.” That said, copper’s demand is expected to skyrocket given the global push to reduce carbon emissions. This is especially the case when it comes to using copper for electric vehicles (EVs) and other renewable energy applications. It’s also the case for data centers for artificial intelligence.
“Demand is expected to outstrip supply by 1.7% in 2035, and copper prices have scaled record highs this year,” Reuters said.
Another bullish component for copper is stretched supply. While demand is increasing, the current operation cycle to mine copper may not be able to appease said demand. As Reuters mentioned, issues related to cyclical commodity prices, smelter charges, and availability of skilled labor pose challenges in bringing abandoned mines back to life. Nonetheless, given the forthcoming demand, it might be worth the operational headaches.
“When you restart an old mine, the belief in the market is that you can bring this mine on quickly. The reality has been sometimes different,” said Daniel Bornstein, a partner at McCarthy Tetrault, who is advising companies on how to rehabilitate abandoned copper mines.
Rising copper prices are also being reflected in their respective indexes. The S&P GSCI Copper and the Bloomberg Copper Subindex have both been pushing higher year to date. They are rising 11.61% and 10.13% , respectively.
Get Copper Growth Exposure
Given the growth trajectory presented by copper, investors have options when it comes to attaining exposure. Sprott has a pair of funds that offer ingress to rising copper prices with exposure to miners.
For a broad-based option that exposes investors to mining companies of varying market cap sizes, an option to ponder is the Sprott Copper Miners ETF (COPP ). That fund tracks the Nasdaq Sprott Copper Miners Index (NSCOPP). This index tracks the performance of a selection of global securities in the industry. That includes producers, developers, and explorers that support the industry. Overall, COPP provides blanket exposure to this mining industryfocusing on large-, mid-, and small-cap mining companies.
For investors who aren’t averse to risk and want an even stronger growth trajectory, small-cap companies can also offer additional potential. With that, consider the Sprott Junior Copper Miners ETF (COPJ ). The fund aims to provide investment results that track the total return performance of the Nasdaq Sprott Junior Copper Miners Index. The index incorporates mid-, small-, and micro-cap companies entrenched in copper-mining-related businesses.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
Past performance is no guarantee of future results. One cannot invest directly in an index. For the latest standardized performance and important risk disclosures regarding Sprott investment products, including each fund’s prospectus, which should be read carefully before investing, please review each product’s webpage by clicking on the corresponding ticker:
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion: PHYS, PSLV, CEF and SPPP
