The US Copper Industry Needs a Strategy, Not a Contradiction

Copper is essential to the modern economy. From home wiring and electric vehicles to renewable energy grids and telecommunications, the metal is necessary for cleaner technologies and more resilient infrastructure. 

The U.S. already uses a lot of copper and will need a lot more to keep up with rising clean energy demands. Yet despite its strategic importance, U.S. copper policy is marked by fragmentation and short-term thinking rather than clear direction. This is especially notable as most analysts believe that, both globally and in the U.S., copper demand is likely to outstrip supply within a decade.

Global demand is projected to rise by 22% from around 27 million metric tons (Mt) today to roughly 33 Mt by 2035 and by 37% to 37 Mt by 2050. Meanwhile, the International Energy Association (IEA) projects that as high-grade ore becomes harder to find and aging mines close, global mined copper supply could peak around the late 2020s at a little over 24 Mt, after which output declines noticeably to less than 19 Mt by 2035.

In the U.S., recent federal efforts have sought to accelerate domestic mining, fast-tracking the permitting of projects in the name of “critical mineral independence.” Yet the combination of tariffs, agency budget cuts and uneven inter-agency coordination have undercut U.S. copper producers and processors. The result is a mixed record: an industry being encouraged to produce more to meet demand and achieve supply chain independence, and a country still lacking a long-term copper strategy to manage that demand and the forecast supply gap.

Furthermore, the vast size and diversity of the global copper market also makes it difficult for the U.S. government to significantly influence it. Unlike other metal markets — like the rare earth element market, where the U.S. provided a $400 million investment in the sole U.S. rare earth mining and processing facility, guaranteed purchase agreements and a price floor for its key product — there are no easy policy wins applicable to copper. Influencing the copper market will require a longer term and more strategic approach.

 U.S. Copper Production and Demand

The U.S. produces 850,000 tons of refined copper from its own mines, plus an additional 870,000 tons in copper scrap from recycling (both post-consumer scrap and new scrap recovered from fabricating operations), but to meet the country’s needs of about 2.5 million tons, it imports an additional 810,000 tons of refined copper. That leaves a 30% gap. While these figures represent U.S. copper consumption, copper demand is likely even higher because the U.S. also imports manufactured goods containing copper that aren’t counted in consumption figures.  

This domestic supply gap leaves the U.S. vulnerable to external shocks and export controls. Without significant U.S. government intervention, the 30% supply gap will likely grow as U.S. copper ore grades decline and demand from clean energy increases.

One potential bright spot is the proposed Resolution Copper Mine in Arizona, a joint venture between mining companies Rio Tinto and BHP, which could, if permitted, supply nearly a quarter of the U.S.’s current mined production. However, without associated refining capacity, the U.S. will continue to remain dependent on refined copper imports.

Forecasting U.S. Demand

The demand for copper is expected to increase rapidly from grid modernization, more electric vehicles, increased renewable energy sources needed to power everyday lives, and from the increase in artificial intelligence which is spurring the rise of high energy consuming data centers.

To support grid modernization and renewables integration, the U.S. will likely need to build an estimated 5,000 miles of new transmission line annually in the coming decades. That figure, based on an analysis from the Department of Energy’s 2024 National Transmission Planning Study, would require hundreds of thousands of additional tons of copper per year, further pressuring the supply base.

Over the last decade, electric vehicle growth in the U.S. has gone from almost negligible to a material source of copper demand. In 2024, 1.6 million electric cars were sold in the U.S., with the sales share growing to more than 10%. The increased copper in the car itself (EVs require up to four times as much copper as a gasoline-powered car), plus the associated charging infrastructure has likely added several hundred thousand tons per year to U.S. copper demand.

According to the IEA, the total amount of new power generation capacity from renewable sources, like solar and wind, in the U.S. rose 40% from 2023 to 2024, mainly reflecting rapid increases in solar PV. Solar power systems contain approximately 5.5 tons of copper per megawatt, with copper in the heat exchangers of solar units as well as in the wiring and cabling that transmits the electricity in photovoltaic cells. The IEA expects stable growth in U.S. renewable capacity in 2025, with slightly lower solar PV expansion and wind capacity from projects that qualified for tax credits before the current administration’s policy changes.

Copper demand tied to AI and data infrastructure is rising fast, too. Data centers and the power and cooling infrastructure that they use all contain substantial copper content in cables, transformers and power delivery systems. In the past two years, construction of data centers has doubled in the U.S as major U.S. tech companies try and stay ahead of the AI-driven demand.

Government Tactics Lack Strategy

The U.S. government is acting with a sense of urgency to reduce the domestic copper supply gap. It recognizes its dependence on imported refined copper coupled with falling U.S. copper ore grades could prove disastrous for a copper-hungry U.S. economy.

Government officials would no doubt argue that they are doing more to advance the interests of copper than any previous U.S. administration and they may be right. For example, copper was recently added to the U.S. Critical Minerals list, making it potentially eligible for federal grants, research funding and streamlined permitting. While it’s not unhelpful to have copper on the list, it’s among 59 other minerals including, aluminum, lead and metallurgical coal, competing for government attention and resources. Other actions have negative or mixed impacts on the U.S. copper supply:

Trade and Tariffs

The signature economic tool used by the Trump administration to date has been tariffs. In August, the administration imposed tariffs of up to 50% on several categories of semi-finished copper imports including copper pipes, wires, rods, sheets and tubes. While these tariffs are likely to increase costs for many downstream industries, the government’s broader tariff regime will also raise costs for mining equipment, spare parts and refining machinery, resulting in higher operating costs for U.S. producers that rely on imported specialized machinery.

Major U.S. copper markets — including China and the EU — have responded to U.S. tariffs with counter-tariffs. This will likely dampen U.S. exports and create uncertainty for global contracts.

Tariff threats and countermeasures have also fueled swings in copper prices, complicating planning and financing for long-term projects. On July 8, President Donald Trump announced, “I believe the tariff on copper, we’re going to make it 50%.”  That caused copper futures contracts on the Chicago Mercantile Exchange to surge 13% as the markets widely assumed that imported refined copper would be targeted. On July 30, when the White House clarified that the tariffs would be on semi-finished copper products, and not refined copper as expected, copper futures contracts fell 19% in the biggest intraday fall on record.

Lastly, instead of shielding U.S. copper, tariffs may make it less competitive. Producers have faced squeezed margins, while downstream industries have been forced to pay more for wiring and other copper products.

Institutional Capacity and Permitting Challenges

Long‑term copper supply depends not just on mines but on the institutions that enable them. Budget cuts at agencies like the U.S. Forest Service (34%), Bureau of Land Management (36%) and Environmental Protection Agency (54%) will slow permitting and environmental review. Delays, uncertainty and regulatory risk discourage investment.

In addition, fast-tracking mine permitting, a signature mining policy from the Trump administration, has a high potential to backfire. Rushed environmental reviews are more likely to be challenged in court, which can result in years of litigation. Unstable rules also discourage the long-term investment that mining requires; a mine approved under one administration may face reversal under the next, scaring off capital. 

Lastly, without reforming downstream processing, further instability in the U.S. copper market is likely. New mining alone doesn’t produce finished copper products; refining and smelting capability must keep pace. In October, Richard Holtum, CEO of the commodity trader Trafigura, caused a minor stir when he said: “Mining is not critical, refining and smelting is critical … If you don’t have it in your country, then you are at the mercy of someone that does and their ability to turn on or off that smelting capacity.”

Internal Coordination

Perhaps the most fundamental problem is the absence of a coherent U.S. copper strategy. Unlike China, which coordinates mining, refining, recycling and trade under a unified framework, the U.S. remains fragmented. 

There is no lead agency, with responsibility for copper split across the departments of the Interior, Energy and Commerce, the Environmental Protection Agency, and in certain circumstances, the State Department, with little coordination. The current administration has set up the National Energy Dominance Council, chaired by the Secretary of the Interior, that could potentially act as a government coordinating body across all aspects of domestic energy, including critical minerals, but in practice, the council seems to be a presidential advisory body rather than a coordinating one that develops coherent and cohesive strategy.

Current U.S. policies give the impression of being reactive rather than proactive, typically driven by short-term trade disputes rather than a long-term vision for copper’s role in the energy transition. This means that with no clear roadmap, companies are hesitating to invest in new smelters, recycling facilities, or long-term exploration. 

Moving Toward a Coherent U.S. Copper Strategy

To ensure that copper is available, affordable and resilient to shock, the U.S. should adopt a forward-looking, balanced approach that includes:

1) Strengthening Recycling and Circular Systems

Recycling is a central piece of any sustainable copper strategy — if properly leveraged. In the U.S., around 870,000 tons of copper scrap was collected in 2024, a figure that technically constitutes approximately one-third of the domestic copper supply. However, that figure does not show that over half of all copper scrap produced in the U.S. is exported for processing, much of it to China. This not only increases the U.S. reliance on China for arguably one of its most critical minerals, but it also forfeits an opportunity to close the copper circular economy loop.

While recycled copper is not without its sustainability challenges, compared to primary copper (mined ore), secondary copper requires up requires up to 85% less energy to produce. As a result, many consumers who are conscious of their carbon footprint are pushing to acquire the same relatively limited supply of recycled copper. The mining company BHP estimates that, as demand for primary copper begins to outstrip supply, collection and process of scrap will increase to around 40% by 2035 and reach around a half of total copper consumption by 2050.

Regions like the EU and Japan have more advanced circular copper approaches, better scrap collection systems and stronger secondary refining capacity giving them an edge in supply security. If the U.S. builds out modern recycling infrastructure, incentivizes scrap collection and processing through grants, regulatory support and procurement incentives, and retains more copper scrap onshore, it can reduce both reliance on imports and carbon footprint, while creating jobs in manufacturing and clean industry.

2) Building Domestic Refining and Smelting Capacity

The U.S. has just two operating primary smelters; and a third that hasn’t been permanently closed, but it’s not currently in operation. Both operating smelters are running at near-full capacity so, if new copper mines are developed in the U.S., new smelters will need to be built to receive their copper concentrate. Modern copper smelters not only cost billions to build but their running costs, in large part due to their energy intensity and the stringent environment regulations they must abide by, are also significant. Rather than providing incentives and public–private partnerships (e.g., subsidies, tax credits) to support the establishment of state-of-the-art, low-emission smelters and electro refineries, the Trump administration has reversed a Biden-era air pollution rule, in the name of reducing regulatory burdens, that had imposed stricter limits on emissions from the U.S.’s two copper smelters.

3) Investing in Scientific and Institutional Capacity

The funding cuts at the agencies that provide environmental baseline studies and regulatory capacity should, at the very least, be reversed, if not increased. Those agencies were already generally considered to be understaffed, a situation that contributed to permitting delays. If the current administration wants to increase domestic mining, the agencies that oversee domestic mining need to be commensurately increased.

4) Streamlining but Stabilizing Permitting

According to the National Mining Association (NMA), “a typical mining project loses more than one-third of its value, as a result of bureaucratic delays in receiving the numerous permits needed to begin production.” The NMA also states that in peer mining countries like Canada and Australia that have quicker permitting processes, the timeline for the government to respond is more clearly outlined, the permitting agency leading the process is clearly identified from the outset, and the responsibility for preparing a well-structured environmental review is given to the mining company, not the government. Reforming these areas of the permitting process would help to reduce uncertainty and delay, however, it is critical that high environmental and social safeguards remain in place, reducing the risk that new mines become litigation bottlenecks.

5) Coordinating a National Critical Minerals Framework

The National Energy Dominance Council could, if empowered to do so, align trade, research and development, industrial policy and supply chain strategy in a coherent policy approach that would boost U.S. copper production. However, the council’s focus is spread thinly between oil, gas, nuclear, the electrical grid, coal and hard rock mining. Reinstating the U.S. Bureau of Mines (closed since 1996) or developing a new, hard rock mine-focused coordinating body would bring in-house many of the functions currently carried out by a myriad of overlapping oversight agencies, would help bring certainty to investors and would incentivize further mineral exploration in the U.S.

Bridging the Copper Supply and Demand Gap

Copper sits at the heart of America’s clean energy, defense and digital economies. The challenge is not merely to extract more but to orchestrate a supply system — mining, processing, recycling and regulation — that is resilient, efficient and forward-looking. With strategic planning and investment, the U.S. can bridge the looming copper gap and ensure that this essential metal powers its economic future.