Copper’s investment case: Running on empty

Copper demand is growing faster than at any point in a generation. Supply is not keeping up — and for reasons that go far deeper than a typical commodity cycle. For investors, the entry point is now.

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Demand is compounding at 3% a year — and accelerating. In China, infrastructure is expanding at speed: high-speed rail, AI data centres, and the emerging humanoid robotics industry are all copper-intensive. In India, a rapidly urbanising population is bringing electricity to every corner of the country for the first time. In the developed world, the energy transition and the AI infrastructure build-out are generating new copper demand that did not exist a decade ago.

The short-term picture is complicated by the US-Israeli war on Iran, which has weighed on global growth expectations and pulled copper back from its all-time highs. Around 60% of copper demand originates in China, but almost half of that flows into export goods — electric vehicles, electronics, machinery — bound for a world now growing more cautiously. In the near term, this creates noise. The structural signal, however, has not changed.
 

KEY DEMAND DRIVERS

How We Ran Out of Easy Copper

Humans have mined copper for thousands of years. For most of that history, it was close to the surface and straightforward to extract. During the Bronze Age, copper was collected from riverbeds and shallow pits. In the 1800s, the American copper rush was defined by the discovery of massive boulders of near-pure copper — like the famous Ontonagon Boulder in Michigan, a solid mass of metal sitting on the ground.

That era is over. The past two centuries of industrial mining have stripped out most of the world’s high-quality, easily accessible copper. What remains is in harder rock, deeper underground, in more remote or hostile terrain. Ivanhoe Mines’ major discoveries in the jungles of the Democratic Republic of Congo, and Rio Tinto and BHP’s Resolution Copper project deep under the Arizona desert, illustrate what frontier copper development now looks like: extraordinary capital requirements, complex logistics, and decade-long lead times before a tonne of metal reaches the market.

Meanwhile, existing flagship mines are ageing. Ore grades at BHP’s Escondida in Chile — the world’s largest copper mine — have fallen steadily for years. The same pattern holds across the Chilean and Peruvian mines that have anchored global copper supply for decades. Lower grades mean more rock must be mined, crushed, and processed to produce the same amount of metal. That translates directly into higher costs, greater energy consumption, more water use, and higher emissions per tonne of copper produced.

“Copper production could face peak-like dynamics under certain assumptions about demand growth, declining ore grades and limited new discoveries.” — Gavin Mudd et al., Monash University 

The investment pipeline reflects this reality. Despite strong price signals, greenfield exploration spending has chronically undershot what demand growth requires — even in exploration-friendly jurisdictions like Australia, which offers some of the most generous tax incentives in the world.

KEY SUPPLY CONSTRAINTS

The Quiet Crisis: A Shrinking Talent Pool

Alongside the geological challenge is a less-discussed but equally structural problem: the people needed to build and operate new copper mines are disappearing from the pipeline.

The Minerals Council of Australia reports that enrolments in mining engineering have fallen 75% from their peak over the past decade. The reasons are not purely cyclical. For many young Australians, mining carries social baggage associated with coal, environmental damage, and the physical hardship of FIFO work in remote locations. Engineering graduates increasingly choose software and technology careers that offer more comfortable lifestyles and, in the current market, competitive salaries. The consequence is a thinning of the skilled workforce needed to discover, permit, build, and run the next generation of copper mines — just as the industry needs more of them, not fewer.

Source: Minerals Council of Australia. Data as of 2022

Where to Invest: The Case for Pureplay Miners

Most major investment banks forecast copper prices remaining elevated through the decade. The most direct way to benefit: copper miners — the companies with the most operational leverage to higher prices.

Within the producer universe, mining is the most attractive segment. Smelting has become economically unviable outside China. Recycling is lower-margin and harder to scale. Mining is where price leverage is cleanest.

Stock-picking here is notoriously treacherous. In October 2023, First Quantum Minerals fell 30% in a single day when Panama announced a surprise referendum on its flagship mine. Political risk, operational setbacks, and project delays are endemic — not exceptions. Diversification isn't just prudent. It's essential.

The obvious large-cap alternatives present a different problem. BHP, Rio Tinto and Fortescue have all made public commitments to copper, but their share prices remain driven primarily by iron ore — diluting the very exposure investors are seeking.

The ETFS Global Pureplay Copper Miners ETF (ASX: CPPR) is designed to address both problems: concentration risk and revenue dilution. It focuses on dedicated miners, excludes smelters and recyclers, and equally weights holdings — concentrating exposure in smaller companies that typically derive the vast majority of their revenue from copper alone. The result is genuine copper purity with genuine diversification, without the need to pick winners in one of the most demanding sectors in global equities.

The structural case for copper is intact. Short-term noise from global growth headwinds will pass. Geological and supply constraints will not. For investors who want clean, diversified exposure to one of the defining commodities of the next decade, CPPR offers a considered entry point.

Sources: Minerals Council of Australia; Gavin Mudd et al., Monash University; Morgan Stanley Global Humanoid Model (2025); BHP Escondida operational reports; Rio Tinto / BHP Resolution Copper project disclosures; Ivanhoe Mines Kamoa-Kakula project updates; J.P. Morgan Global Research critical minerals outlook (2026).

Disclaimer: The issuer of units in ETFS Global Pureplay Copper Miners ETF (CPPR)(ARSN: 695 413 113) is the responsible entity of the Fund, being ETF Shares Management Limited (ABN 77 680 639 963, AFSL: 562 766).

The product disclosure statement (PDS) and Target Market Determination (TMD) for the Fund contains all of the details of the offer of units in the Fund. Copies of the PDS and TMD are available from ETF Shares Management Limited or at www.etfshares.com.au.

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