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DRC/Zambia: Is copper Africa’s new oil?

By Christophe Le Bec
Posted on Monday, 3 May 2021 23:38, updated on Tuesday, 4 May 2021 11:44

Chambishi Copper Mine (NFCA), Zambia © Sven TORFINN/PANOS-REA

Until now, professionals in the mining sector thought that the charismatic Robert Friedland, CEO of Ivanhoe Mines, which is developing the Kamoa-Kakula copper megaproject in the DRC, was simply looking out for his best interests when he presented copper as the  ‘metal of the future’ at his investor conferences.

But now many analysts share his point of view, including those at Goldman Sachs, who in early April published a research note titled Copper is the new oil, that is causing a stir among commodity traders.

In this 30-page document, Goldman Sachs argues that there can be no energy transition without this key metal; the price of which is predicted to rise to $11,000 per tonne in London, by April 2022, before reaching some $15,000 per tonne by 2025.

Not enough sites to meet demand

Copper is currently trading at around $9,500 per tonne in London, which is already its highest price in a decade. A year ago in April, it was selling at below $5,000 per tonne, the same price it was going for in November 2015 and October 2016.

Anton Löf, a metals market specialist at the Stockholm-based RMG Consulting, agrees for the most part with Goldman Sachs’ analysis.