Australia Inc: The copper resources and production gap

Australia may be sitting on one of the more valuable economic opportunities of the next decade.

On a recent episode of the Australia Inc. podcast (available on Apple and Spotify), the discussion turned to copper and the gap between Australia's geological endowment and what we actually produce.

One panelist put it starkly: “Australia has got the second biggest copper reserves on Earth. But we only rank eighth in overall global production.”

Geoscience Australia classifies Australia as having the world's second-largest economic resources of copper.

Australia holds about 11 per cent of the world's economic copper resources, yet produces only around 3 per cent of global output. In 2024, Australia produced about 750,000 tonnes of copper, ranking eighth globally.

That gap is becoming considerably more interesting because the world is going to need much more copper.

S&P Global estimates global copper demand will increase from about 28 million tonnes in 2025 to 42 million tonnes by 2040 — an increase of roughly 50 per cent.

Copper is fundamental to electricity networks, renewable generation, electric vehicles, conventional industrial equipment and increasingly data centres and AI infrastructure. Electrification requires conductors, and copper remains exceptionally difficult to replace across many high-value applications.

The problem is that supply cannot simply be switched on.

The International Energy Agency says average global copper ore grades have fallen about 40 per cent since 1991. Lower grades mean more rock must be mined and processed to produce the same amount of copper.

Major new discoveries have also slowed dramatically. Only around 5 per cent of copper deposits discovered during the past 35 years were found in the past decade.

And even when a substantial deposit is found, S&P Global estimates that it takes around 17 years on average to move a new copper mine from discovery into production.

That combination — deteriorating ore quality, fewer discoveries, rising development costs and extremely long lead times — means supply is unlikely to respond quickly to higher prices.

S&P Global estimates that, without major additional investment and supply expansion, the global copper shortfall could reach around 10 million tonnes annually by 2040.

For Australia, that creates an intriguing question.

We already have the copper.

The economic opportunity is turning more of it into production.