AI Boom Set to Trigger Worldwide Copper Shortage by 2040

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The rapid expansion of artificial intelligence infrastructure is fueling a massive surge in global copper demand, a key metal found in nearly every piece of modern electronics. By 2040, up to a quarter of this demand might go unmet, as no viable substitutes have emerged yet, according to a recent analysis by consulting firm S&P Global reported by Reuters.

Demand is projected to climb 50% by 2040, reaching 42 million metric tons annually from the 28 million tons recorded in 2025. Meanwhile, supply could fall short by over 10 million tons each year.

A major driver behind this trend is the boom in AI and data center construction. In just the first 11 months of 2025, over 100 new data center projects were launched worldwide, totaling nearly $61 billion in investments, per S&P Global Market Intelligence data.

Copper’s appeal lies in its exceptional electrical conductivity, corrosion resistance, and ease of shaping, making it indispensable for electronic components ranging from tiny circuits to larger hardware.

To meet the escalating needs, fresh supply sources are essential, the report emphasizes. Currently, Chile and Peru lead in copper extraction, with China as the top refiner. However, climate shifts are expected to hinder output in these regions, as noted by PricewaterhouseCoopers experts in a July 2025 assessment covered by CNews.

In Chile, water scarcity—critical for mining operations—already threatens 25% of production. This risk could rise to 75% in the next decade and approach 100% by 2050. By 2035, most of the 17 key copper-supplying nations for the semiconductor sector may face drought vulnerabilities.

Shortages are already pushing prices upward. For instance, a disruption at Indonesia’s Grasberg mine, which supplies about 3% of global copper, caused a 3% price spike to $10,300 per ton in fall 2025. Earlier that year, the metal traded at around $8,900 per ton.

Copper edges out most materials in conductivity, second only to silver, while also excelling in heat dissipation to prevent component overheating. Its durability, machinability, and rust resistance extend device lifespans and boost reliability.

From microchips with billions of tiny copper wires to connectors and cooling systems, it’s the go-to choice for electronics. Despite ongoing research by companies and labs into alternatives for chip manufacturing, copper remains unmatched in performance and cost-effectiveness.

Summary: Countries with the Largest Copper Reserves, Volumes, Costs, Industrial Value, Mining Locations, and Major Ore Deposits

Copper is a critical industrial metal prized for its superior electrical and thermal conductivity, corrosion resistance, and malleability. It’s essential in electronics (e.g., wiring, circuit boards, semiconductors), renewable energy systems (solar panels, wind turbines), electric vehicles (batteries, motors), construction (plumbing, roofing), and defense technologies. Its role in the global energy transition and AI infrastructure makes it indispensable, with no cost-effective substitutes currently available. As of early 2026, copper prices have surged to over $13,000 per metric ton due to supply constraints and rising demand, up about 40% from 2025 levels. Global refined copper consumption is projected at around 30 million metric tons for 2026, with China alone accounting for 50-60% (about 16 million tons), driven by EV and manufacturing growth.

Below is a summary of the top countries by copper reserves and production, based on 2024-2025 data (latest available; reserves are estimated proven and probable resources). Production volumes reflect annual mine output in million metric tons (Mt). Costs vary by operation but average $4,000-6,000 per ton for extraction and refining, influenced by ore grades (declining globally from 1.4% in 2010 to 0.65% in 2024), energy prices, and environmental regulations. Major ore types include porphyry (low-grade, large-volume), sedimentary (high-grade), and others like chalcopyrite, chalcocite, bornite, malachite, and azurite. Mining often involves open-pit or underground methods, with innovations like bioleaching and automated solvent extraction aiming for sustainability.

Country	Estimated Reserves (Mt)	2024 Production Volume (Mt)	Key Mining Locations and Major Deposits	Notes on Industrial Value and Costs
Chile	~200 (world’s largest)	5.3	Atacama Desert (Escondida, Collahuasi, Chuquicamata); Andean porphyry deposits. World’s biggest mines here.	Dominates global supply (27% share); vital for electronics and EVs. Water scarcity raises costs (up to 25% operations at risk); prices spiked due to disruptions.
Peru	~120	2.6	Andes Mountains (Cerro Verde, Antamina, Las Bambas); porphyry and sedimentary ores.	Second-largest producer; Chinese investments boost output. High-altitude mining increases costs; 77% production growth 2015-2019. Key for global chip and renewable sectors.
Democratic Republic of Congo (DRC)	~80	3.3	Copperbelt region (Katanga Province: Tenke Fungurume, Kamoa-Kakula); high-grade sedimentary deposits.	Rapidly rising producer; cobalt byproducts add value for batteries. Geopolitical risks elevate costs; joint ventures with China dominant. Essential for EV industry.
Australia	~90	~0.9 (2024 est.)	Olympic Dam, Mount Isa; porphyry and sedimentary in remote areas.	Stable supplier; advanced tech keeps costs moderate. Critical for Asia-Pacific electronics; reserves support long-term green energy needs.
United States	~50	1.1	Southwest (Arizona: Morenci, Bagdad; Utah, New Mexico, Nevada, Montana); porphyry deposits.	Tech-driven mining; environmental regs raise costs ($5,000+/ton avg.). Key for domestic defense/electronics; declining grades challenge output.
China	~30	~1.8 (mine production; leads in refining)	Various provinces (Dexing, Jiangxi); porphyry and other types.	World’s top consumer/refiner; imports heavily. Industrial value immense for manufacturing; state control stabilizes costs but faces environmental pressures.
Indonesia	~50	~0.8	Grasberg (Papua); massive porphyry deposit.	Disruptions (e.g., 2025 accident) spike global prices. Vital for semiconductors; high rainfall/geology add extraction costs.
Russia	~60	~0.7	Ural Mountains, Siberia (Udokan); various ore types.	Geopolitical factors affect exports; key for industrial machinery. Lower labor costs but sanctions impact.
Zambia	~20	~0.8	Copperbelt (shared with DRC: Kansanshi, Sentinel); sedimentary deposits.	African hub; power shortages raise costs. Supplies EV/tech sectors; bioleaching tech emerging.
Mexico	~50	~0.5	Sonora (Buenavista del Cobre); porphyry ores.	Growing producer; proximity to US market adds value. Moderate costs; important for North American electronics supply chains.

Other notable countries with large deposits include Poland (Zechstein basin, sedimentary), Kazakhstan (high-grade sedimentary), and Canada (porphyry in British Columbia). Global reserves total ~870 Mt, but declining ore grades and permitting delays (e.g., Alaska’s Pebble deposit, one of the largest undeveloped at ~80 Mt reserves) could exacerbate shortages. South America holds ~45% of production share with medium-high risks, while innovations aim for >70% sustainable extraction by 2026 to cut waste and energy use.