Yukonomist: Missing the copper trend
Are we missing the boat on the clean-energy transition?
Keith Halliday
about 16 hours ago
Keith Halliday
Back in the day, when we flew back to Whitehorse on CP Air after a vacation Outside, my father used to joke “Welcome to Whitehorse. Set your watches back ten years.”
Yukoners who grew up before the internet will remember how fashion trends used to arrive here. The principal would walk into your class with a new kid who was wearing strange and intriguing garb from the big city (as well as an expression of alarm and resentment at where their parents had moved them).
Nowadays, Yukon youth and their phones are instantly up to date on the latest fashion.
However, our economy is still deciding whether to shift from Levi’s 501s to Gap khakis.
The cool kids at Davos High are into the energy transition look. Windmills, hydrogen, Teslas and critical minerals are the must-have accessories.
We have a few early adopters. You occasionally see an electric vehicle plugged into the charging station by the airport. In the actual Gap khakis era, Whitehorse had two windmills. Now we have four. Some of the kids in the mechanically gifted stream have installed their own heat pumps. Quite a few people have solar panels but these, like trendy tattoos, are visible only in the summer.
But the trend we have completely missed is the copper inside all those trendy gadgets.
Climate pundits compete to estimate how many more times copper we will need to wire the planet for the millions of vehicles, heat pumps, windmills, solar panels and transmission lines we will need for the Net Zero world.
The International Energy Agency (IEA) forecasts we will need 32 percent more copper by 2040 than we produced in 2020 if countries live up to the climate policies they have announced. In the IEA’s more aggressive Sustainable Development scenario, we’ll need 40 percent more. Bloomberg reports that CRU, an industry consultancy, forecasts demand growing to this level by 2050 anyway even if the most ambitious Net Zero scenarios don’t pan out.
Meanwhile, the industry is facing immediate supply issues. In the face of widespread environmental and governance protests, the Panamanian government recently ordered the Canadian-owned Cobre Panam mine to halt operations. The massive $10-billion mine produced around one percent of world copper output. This comes on top of unexpected operational problems at a number of other major mines around the world.
The result has been a surge in copper prices. Back in 2002, during the Yukon mining industry’s near-death experience, copper traded for around US$ 1600 per tonne. It has been over US$6000 per tonne since mid 2020, and was trading last week at over US$9850 per tonne in London.
Miners in countries such as Chile, Democratic Republic of Congo, Australia and Russia are working on major projects to ramp up production.
The Yukon has even more copper than out-of-fashion clothing. The Yukon Geological Survey’s map of “Copper targets in Yukon” shows 14 deposits plus several dozen measle-like blotches signifying attractive geology.
Nor are we one-trick copper ponies. Your kids will be fascinated to hear from you at the dinner table that we have skarn deposits and Jurassic alkalic copper-gold porphyry deposits, as well as “Cretaceous porphyrys, Devonian-Mississippian volcanic-associated deposits, Triassic mafic-ultramafic-associated copper-nickel deposits and a number of Proterozoic iron oxide-copper-gold occurrences.”
Copper was, of course, the defunct Minto mine’s primary output. The huge Casino project is also focused on copper.
Minto’s particularly rich copper grades were not enough to get it over the mine’s other challenges. Bidders seeking to reopen the mine emerged during the bankruptcy process, but the proponents, the territorial government and the Selkirk First Nation (which collects royalties on the mine) never issued that celebratory press release everyone was waiting for.
The details of the negotiation are confidential and the court process ongoing, but the current plan is to liquidate the mine’s assets and reclaim the site.
So we find ourselves not wave-surfing the latest trends, but wondering why we don’t even have a kayak. Prices are high and copper bulls are hyperventilating at global conferences. But if you renovate your bathroom this month and replace your copper pipes with PEX, you will put more metal into the global copper market than the Yukon mining industry (assuming you recycle your old pipes at Raven).
For some Yukoners, this is a good thing. Why take on the environmental risk of mining, they ask, when the feds are giving us $1.775 billion this year whether we build a local economy or not?
But for those who want to build economic independence for the Yukon, or even contribute to the security and climate transition needs of our nation and our allies, it represents a massive missed opportunity.
And it’s not like we are overwhelmed with opportunities. We still have our old friend, gold. We’ve said no thanks to oil, gas and exporting electricity to BC. Tourism is recovering, but the average job in that industry pays a lot less than mining. We are attracting some remote tech and knowledge workers, but have to compete for them with Canmore, Nelson and Squamish. Agriculture is growing but small. Foreign students are an opportunity for YukU, but their total number is limited. We don’t have any big data centres or manufacturing facilities.
From the jobs and economy point of view, it would be great if the Yukon had two or three responsibly-run copper mines.
How, you may be asking, did this happen? While blamestorming is fun, however, it’s more productive to look at what we would need to do so that we have more than zero copper mines a few years in the future. Which I will look at in next week’s column.
Keith Halliday is a Yukon economist and the winner of the 2022 Canadian Community Newspaper Award for Outstanding Columnist. His most recent book Moonshadows, a Yukon-noir thriller, is available in Yukon bookstores.