Copper exploration budgets signal tighter future supply

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Copper exploration budgets signal supply risk

Highlights

Global nonferrous exploration budgets are projected at $15.5 billion for 2024, well below the inflation-adjusted 2012 peak of $20.5 billion.
No major copper deposit is expected to be discovered in 2025, while average discovery-to-production timelines now stretch 17.5 years, per S&P Global.
The International Energy Agency forecasts a potential 25% copper mine-supply shortfall by 2035 against a projected 7 million metric ton demand increase by 2040.

Copper spending trends and supply timeline

As reported by Weiss Ratings, global nonferrous exploration budgets are expected to reach about $15.5 billion this year, based on S&P Global data. That remains below the $20.5 billion spent in 2012, and the shortfall is wider after adjusting for inflation.

In copper, 43% of global exploration budgets in 2025 went to minesite work around existing deposits, while 25% went to grassroots exploration for new finds. The shift reflects lower risk and faster returns at established operations, but it also limits the pipeline of new major deposits.

S&P Global says no major copper deposit meeting its threshold is discovered in 2025. Since 1990, 263 major copper discoveries are recorded, but 165 still have not entered production and only 17 have reached construction or preproduction.

The challenge is growing as copper exploration drilling goes deeper, with average depth rising nearly 50% since 2010 to around 600 meters. S&P Global also calculates that an average copper deposit now takes 17.5 years to move from discovery to production, leaving little room for a late response if shortages emerge in the 2030s.

Demand outlook supports tighter market view

The International Energy Agency expects copper demand to rise by roughly 7 million metric tons by 2040, and it sees a potential 25% mine-supply shortfall by 2035 based on the current project pipeline. BHP Group also expects global copper demand to exceed 50 million metric tons annually by 2050, underscoring the scale of future capacity needs.

That outlook strengthens the case for higher copper prices if new supply continues to lag. Weiss Ratings points to the Sprott Physical Copper Trust, ticker SCOP, as a direct way to track the metal, saying the fund currently holds about 14,559 metric tons of copper valued at roughly $211 million.

The trust carries an expense ratio of 1.4%, but the broader argument centers on a structural imbalance rather than a near-term trading move. With discoveries harder to make and project development timelines stretching longer, the sector faces mounting pressure to bring forward new supply well before demand peaks.

In our earlier article on WTO warnings about lasting trade impacts from the wars in Ukraine and the Middle East, we noted that companies are redesigning supply chains and shipping routes to reduce exposure to future shocks, even if costs rise. The WTO also projected a sharp contraction in Middle East trade and argued that fragmentation and regionalization could persist alongside continued uncertainty from conflicts and tariffs.

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