As a Northern California native, it was easy for me to fall in love with Chile. Once you are out of congested Santiago, the central part of the country offers gorgeous scenery. Vineyards and wineries cover the deep green hills. Its rocky coastline reminds me of Monterey or Marin County. And then there’s the coastal city of Valparaiso, hilly in geography and Bohemian in atmosphere. You can navigate around these points easily because of the country’s modern roads, one symptom of the country’s growing wealth. As you return to Santiago, you can drop by one of its suburban malls and you would think you were plonked in the US or Canada: crowded, they are full of Starbucks and superstores that make your local Costco look like a 7-Eleven. And what is behind Chile’s affluence? Copper. But can copper mining continue to fuel the Chilean economy? Is it a sustainable industry?
Copper accounts for one-third of Chile’s exports, and by some estimates, is the backbone of one-half of the Chilean economy. One-third of the world’s supply of copper comes from Chile. Despite the global recession, the demand for copper continues. Just drive through the Inland Empire along I-10: billboards warn you not to steal copper pipes from foreclosed homes in this region. After iron and aluminum, copper ranks as the third most important metal for industrial use, thanks to its ability to conduct electricity, provide strong piping, and its necessity as an alloy. But some suggest that copper may be reaching its peak production. So are we facing a copper crisis analogous to the future depletion of oil reserves?
Unlike oil, copper can be recycled. Unfortunately, too much of it ends up in a landfill, due to the disposal of consumer goods and construction materials. Mining copper is also a dirty and fuel-intensive enterprise, and as more copper is extracted, mining companies venture farther in procuring this valuable metal–with the possibility of ecologically disastrous results. Some suggest that in the future, landfills will become the new copper mines. That possibility, however, is unlikely, as the amount of energy required to extract copper from such as source would be far too expensive and akin to gleaning copper out of very poor quality ore. And like oil, the use of copper increases as more people climb into the middle class: just as consumers in India and China will drive more automobiles in the future, they will also buy more electronics and other products that require the use of copper.
So when will the production of copper reach its peak? Most reports indicate anywhere between 2020 and 2025; others suggest it may be decades. But what is frightening about an impending copper shortage is that there really are no viable substitutes for this metal. Copper is essential for electronic equipment; other materials, such as aluminum, do not offer the same robust qualities as copper offers. Nanotechnology, often hyped as full of promise, has a way to go. So the price of copper just continues to rise.
The implications are huge for Chile. CODELCO, Chile’s nationalized copper mining company, is a huge contributor to the country’s treasury. After copper, the economy is dependent on food and timber exports. Much of Chile’s land is difficult to access and develop because of daunting mountains or extremely dry deserts. Although the country has made impressive advances in the past 20 years, and boasts a model pension system, a collapse in copper production could have severe consequences for a country that still has great wealth disparities.
Can anything be done to avoid this fiasco? There is no consensus whether peak copper is a cause for concern, an absolute certainty, or just misplaced hysteria. Obviously, we all have to strive to improve copper recycling rates. But with all the focus on finding alternative forms of energy, perhaps there is an opening for entrepreneurs to find a scalable alternative to copper. Of course, we shouldn’t be wasting energy . . . but government and industry should be cooperating in reducing electronic and construction waste, as the risks from running out of copper will affect all of us.