Northern Dynasty CEO predicts copper demand surge

Northern Dynasty Minerals Ltd. [NDM-TSX; NAK-NYSE American] President and CEO Ron Thiessen said recent targets set by the U.S. government for America’s transition to clean, renewable energy will drive a massive increase in domestic copper demand and consumption over the coming decade.

“For many reasons – including its cost, conductivity, ductility and durability – copper is an irreplaceable metal for renewable and low-carbon energy and electrification technologies,” Thiessen said in a press release Monday.

He said the volume of copper used per unit of energy output in renewable energy systems (or copper intensity) can be two to five times greater than in conventional energy generation.

“The US imports more than 35% of its annual consumption of refined copper today. When you consider the vast amounts of additional copper metal required to achieve both President Biden and U.S. Congress’ climate change adaptation goals, as well as the American Jobs Plan mandate to bring associated manufacturing jobs home to the United States, the increase in demand over the next decade will be truly staggering,” Thiessen said.

Among the renewable energy sources prioritized by the U.S. government are offshore wind farms, for which President Biden set a target of developing 30,000 megawatts of new energy generation capacity by 2030. Achieving his goal, which would deliver enough renewable energy to power 10 million American homes, means the country must achieve a +7,000% increase in its current offshore wind farm capacity in under a decade.

According to the International Energy Association, offshore wind is the most copper intensive source of mass energy generation – requiring an estimated eight tonnes of copper per megawatt of installed capacity (T/MW) versus 2.9 t/MW for onshore wind, 2.82 t/mw for solar, 1.47 t/mw for nuclear, 1.15 t/MW for coal and 1.1 t/MW for natural gas.

“What these numbers tell us in the United States’ goal to transition from carbon-intensive energy derived from conventional sources such as coal and natural gas to renewable energy from clean sources such as wind and solar will drive a step change in the country’s copper consumption,” Thiessen said.

“Based on the President’s 30,000 MW offshore wind generation target alone, the United States will have to source an additional 240,00 to 450,000 tonnes of refined copper metal between now and 2030. That represents about one-quarter to one half of the country’s current annual production,” he said.

Thiessen went on to say that the United States today is home to several of the most significant undeveloped copper resources in the world, and possesses both the industrial expertise and environmental oversight to develop them safely and responsibly.

“Whether it chooses to do so, or whether it opts to increasingly rely on foreign producers – including those with questionable environmental and human rights records, and those controlled by competitors like China – will be entirely up to the current generation of political leadership,” Thiessen said.

The list of undeveloped copper resources in the United States includes Northern Dynasty’s Pebble Project in Alaska. First discovered in 1989, the Pebble project ranks as one of the world’s largest undeveloped gold-copper resources.

At a 0.3% copper equivalent cut-off, the Pebble Project is estimated to contain 6.456 billion tonnes in the combined measured and indicated categories at a grade of 0.40% copper, 0.34 g/t gold, 240 ppm molybdenum, containing 57 billion pounds of copper, 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million ounces of silver.

On Monday, Northern Dynasty shares jumped 7.8% or $0.05 to 69 cents on volume of 351,800. The shares are trading in a 52-week range of $3.28 and 38.5 cents.