US copper pipeline could reach 1.3 million tonnes a year as critical minerals push gathers pace, says JP Morgan

JPMorgan, the investment bank, says a focus on securing critical minerals supply is reviving US copper investment, lifting its estimate of potential new supply to about 1.3 million tonnes a year.

US mined output has fallen about 50% over 30 years to roughly 1 million tonnes, and its share of global mined output has dropped from about 50% in 1900 to below 5%.

The bank ranks the US third globally for potential supply additions, behind Chile and Argentina, though most of the capacity is likely to come online only after 2030.

Capital intensity is higher in the US, at about $28,000 for each tonne of annual capacity, against a global average of about $26,000.

Regulatory reforms such as the FAST-41 legislation are helping to accelerate projects that previously faced lengthy permitting processes, while in-situ leaching and the restarting of older mines are also helping to drive supply growth.

Freeport-McMoRan is best positioned in the medium term, with more than 250,000 tonnes a year of potential brownfield growth, albeit at relatively high capital intensity, and JP Morgan rates it ‘overweight’.

Resolution, the greenfield joint venture between Rio Tinto and BHP, in which they hold stakes of 55% and 45% respectively, accounts for nearly 50% of the US project pipeline, but a final investment decision is unlikely before 2030 given the ongoing permitting and project evaluation process.

The US would also need more smelting capacity to process and refine additional copper concentrate domestically, as it faces a primary copper supply deficit of about 1 million tonnes.