The Global X Copper Miners ETF has climbed 37% over the past year as demand from AI data centers and power grid upgrades builds against a shrinking supply pipeline. Hyperscale data centers can require up to 50,000 metric tons of copper per facility, while new mines take 16 to 18 years to reach production. Together, these trends could push copper prices higher as structural supply constraints emerge by 2028.
Copper rarely draws the attention gold or silver get, but it could be nearing a turning point. Demand is climbing while aging mines produce less, and new supply isn't arriving fast enough to fill the gap. That combination could drive copper prices higher over the next decade.
Data centers are pulling copper into the AI buildout
Alphabet, Amazon, Microsoft, and Meta Platforms are spending $735 billion on capital expenditures this year, much of it directed at data centers, and McKinsey projects data center investment could reach $7 trillion by 2030. Copper's electrical conductivity and thermal efficiency make it essential for the busbars, power distribution units, and liquid-cooling systems these facilities rely on.
According to the Copper Development Association, next-generation data centers can require up to 50,000 metric tons of copper, versus 5,000 to 15,000 tons for conventional facilities. S&P Global forecasts copper demand could rise 50% by 2040, with AI and data center demand tripling over that period.
Power grids need more copper to keep up
Data centers are only part of the story. As more of them come online, power grids must expand and upgrade aging infrastructure to meet demand, and renewable energy systems require more copper per megawatt than fossil fuel plants.
According to the Bank of America Institute, U.S. electricity demand is projected to grow 2.5% annually through 2035, five times faster than the previous decade. Grid upgrades can take four to 12 years. The International Copper Association estimates roughly 44% of all copper produced goes to power generation, distribution, and transmission.
Mine supply is struggling to keep pace
Meanwhile, major producers in Chile and Peru face declining ore grades. Mined material often yields less than half a percent of copper per ton, which pushes up operating costs. Few major greenfield mines are scheduled to come online in the next few years, and S&P Global Market Intelligence estimates these projects can take 16 to 18 years to reach commercial production from initial exploration.
Copper markets may find temporary relief in 2027 as brownfield expansions ramp up and scrap recycling increases. Greenfield supply stayed scarce after miners were penalized for cost overruns on megaprojects following the 2015 commodity crash, and few new projects have followed since.
Source: The Motley Fool
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