Digging Deeper with US Copper Mining

By Luke King

In a feature story from Issue 1, 2024 of Breakbulk Magazine, executives from Blue Water Shipping and DHL Global Forwarding assess the exciting project opportunities emerging in the U.S. mining sector following the government’s recent designation of copper as a “critical” raw material.


Such is the importance of copper, global clean energy strategies are being undermined by a lack of mines under development. The metal is used in everything from domestic appliances to electrical wiring and is vital to build electric cars and upgrade electricity grids.

Project forwarders have an essential role to play in the race for copper – helping to source mining equipment and other materials around the world and delivering them safely and on time to the mining sites. They could now benefit from copper’s upgraded status in the U.S. – a development that may stimulate domestic production.

“Copper is a major contributor to U.S. economic and national security, with copper demand projections doubling by 2035, primarily due to plans for the clean energy transition, electrification and clean water infrastructure,” said Andrew G. Kireta, Jr., president and CEO of the Copper Development Association, a non-profit advocacy group.

Not unexpectedly, Kireta welcomed the U.S. Department of Energy’s inclusion of copper in its 2023 Critical Materials Assessment last summer. The designation of copper as a critical raw material unlocks government subsidies available under the Inflation Reduction Act, and follows similar moves by Canada, the EU, Japan, India and China.

While acknowledging the associated tax credits worth up to US$4 billion, Kireta added: “We will continue to advocate for the inclusion of copper on the official USGS Critical Minerals list, especially since items such as the EV tax credit, inclusion on the permitting dashboard, and the many permit reform legislative initiatives circulating congress are all dependent on being on this larger list.”


'Robust Growth’ Expected

According to a GlobalData report, U.S. Copper Mining to 2026, the U.S., currently the world’s fifth largest producer, is likely to see “robust growth” in copper output in the coming years. Despite a slight dip in U.S. production in the five years to 2021 – attributed to multiple factors such as declining ore grades, maintenance at smelters, poor weather conditions and pandemic-related disruption – GlobalData anticipates a Compound Annual Growth Rate (CAGR) of 5.6 percent during the forecast period spanning 2024 to 2030.

Project freight forwarders will likely be tracking the progress of the circa 40 copper mines in various stages of development in the U.S. Later this year, Rio Tinto will ramp up underground copper mining at its Kennecott operation near Salt Lake City, Utah. The Anglo-Australian mining giant is investing nearly US$500m in the North Rim Skarn, which is expected to deliver around 250,000 tonnes of additional mined copper over the next 10 years.

GlobalData has identified a number of copper mining projects that it believes have “higher probabilities of commencement,” including Back Forty Project in Michigan’s Upper Peninsula, which it said could have a copper production capacity of 3.2kt and begin operations in 2025.

By the same year, copper mining could also commence at Pinyon Plain Mine in Arizona, according to the data analytics firm. Formerly known as Canyon Uranium Mine and located just 10 miles south of the Grand Canyon, Pinyon Plain has been able to circumvent a 20-year moratorium on uranium mining in the region, owing to the fact it was originally permitted in 1984. While uranium is the key focus, copper will also be mined at Pinyon Plain.

GlobalData also highlights the South Mountain Project, a pre-development project focused on zinc, silver, gold and copper located seventy miles southwest of Boise, Idaho, which it says could be operational by 2028.


Huge Demand for Copper

Melanie Kenderdine, keynote speaker at Breakbulk Americas 2023 and executive vice president at the Energy Futures Initiative (EFI), a Washington- DC based non-profit organization active in the field of energy policy, told Breakbulk that demand for copper would be “huge in the coming years.”

This demand will be driven not only by renewable wind, solar power and electric vehicle production, but also by the large number of new transmission line towers, all made of aluminum, steel and copper, that will be required by 2030 if the U.S. is to hit its net zero targets, Kenderdine said.

Notwithstanding the critical materials listing, she warned that inactive copper mines – including those in Arizona, New Mexico and Maine – would not “get off the ground at the expense of environmental considerations."

Kenderdine said: “Many of those inactive and potential mines are in very close proximity to Native American lands, so we are going to have to be cognizant of these issues as well. But the world and the U.S. need these metals and minerals – we are going to have to address both the issues of Native lands and the need for metals and minerals for the clean energy transition.”

An additional consideration is that many inactive mines in the U.S. are located on “Superfund” sites that are highly polluted with hazardous materials and therefore require clean up intervention. “This is an indication of the history of environmental concerns with mining that will need to be addressed as we move forward,” Kenderdine said.


Early Engagement

Like other project forwarders, Blue Water Shipping gets involved in mining projects as early as possible, including at greenfield stage before operations begin. In an interview with Breakbulk, Stephen Westfield, Blue Water’s global head of mining, said this was a “fascinating and exciting” time to be working in mining logistics.

The Sydney, Australia-based executive agreed that the U.S. listing of copper as a critical material was an important development. “It will expedite copper projects, and not just the mining – downstream it will stimulate projects to process copper and lithium and other critical minerals, which have been historically shipped to countries in Asia for processing. We are seeing a shift to processing of minerals and integration along the value chain domestically in North America.”

He believes global commitments to net zero are simply “not going to happen” without “dramatic increases” in mining of critical minerals – and that in turn will lead to more work for project forwarders.

“There’s the potential for logistics professionals to tap into these projects, and the U.S. is certainly a big part of that. Conceptually, we are looking at 50 new lithium mines, 60 new nickel mines, 17 new cobalt mines globally, just to meet demand, by 2050. It’s a big task but, ultimately, it’s up to the mining sector, stakeholders and governments to push through permitting and make these projects happen.”

Blue Water Shipping launched its mining vertical 18 months ago following successes in Australia and Papua New Guinea, where its clients include Newcrest and First Quantum Minerals. The bullish forwarder is now rolling out logistics services for the mining sector into other markets, such as the Americas.

Westfield noted that Blue Water was bidding for gold, copper and lithium mine projects in Nevada and other North America locations, though he stressed that domestic procurement and trucking was a greater feature in the U.S., compared with Australia where there is “a massive dependence on shipping and chartering vessels.”

He said Blue Water was increasingly seeing mining companies that liked to self-execute and bid for projects directly. “Generally speaking, the large Tier 1 mining firms retain some control over the project logistics task, supported by in-house shipping departments and logistics teams. Some mining companies have chartering managers, but they still call on Blue Water to utilize our in-house experts and engineering teams, especially when they have large volumes and complex shipments to manage.

"We like to have early engagement and do tasks like logistics studies prior to the official tendering through the principal or the EPC. We try and engage well before there’s any RFP.”


Permitting Problems

Environmental considerations were a key feature in a Breakbulk interview with Gavin Erasmus, Industrial Projects global sector head for mining at DHL Global Forwarding. UK-based Erasmus has spent 20 years working in mining – either for OEMs, or mining houses themselves.

While Erasmus thought the critical material listing would have a positive financial impact, he too doubted the move would shortcut the permitting process. “The listing will provide some tax credits and government subsidies, but I don’t think financing has been the big issue in the U.S.,” he said.

“These projects are mainly in the Southwest, places like Utah, Nevada and New Mexico – the desert – so permitting has always been the issue from an environmental point of view, particularly water. Mining is very water intensive and if you are mining in the desert, you are using a lot of a very limited resource.

“Then you have the added consideration that a lot of that land is traditionally Native American, and I’m not sure what effect the listing is going to have on these two factors. It will definitely have financial benefits – but will it make permitting any easier, and will it stop the various groups taking up litigation against the mines?”

Erasmus pointed to the numerous mining projects that are currently “tied up” with legal and permitting issues. Last year, the U.S. Environmental Protection Agency blocked the proposed Pebble copper-gold mining project near Alaska’s ecologically sensitive Bristol Bay.

While acknowledging there was “a lot of potential in the U.S.,” the DHL executive also returned to the comparatively limited logistics scope associated with American mining projects. “From a project forwarding point of view, the U.S. may not be your most attractive market, in that most of the major construction material and the equipment required can be obtained domestically. There’s always a lot of domestic trucking.

“Compare that to somewhere like Pakistan, where everything is going to be imported – there are lots of different global origins and general and containerized cargo as well as charters, and that’s very attractive.”


Blue Water Shipping and DHL Global Forwarding will be exhibiting at Breakbulk Middle East 2024 on 12-13 February at the Dubai World Trade Center. Reserve your tickets. 

MAIN IMAGE: A copper smelting plant at Rio Tinto's Kennecott mine in Utah. CREDIT: Rio Tinto.