Is COPPER the New Silver? Price Keeps Going 'Higher and Higher'

Key Concepts

• Copper Market Dynamics: Supply/demand imbalances, impact of AI and electrification, influence of geopolitical factors (tariffs, Panama issues, Congo issues, Grasberg issues).
• Tier 1 Copper Project: Large-scale, high-grade, economically viable copper deposit (typically >1 billion tons).
• Makoa Project (Copper Giant): A significant copper-molybdenum deposit in Colombia, aiming for Tier 1 status.
• Preliminary Economic Assessment (PA): A study outlining the economic viability of a mining project.
• Supply Demand Deficit: A situation where the demand for a commodity exceeds the available supply.
• Comex & LME: Major copper futures exchanges (Comex in the US, LME globally).
• Mollybdenum (Malebdinum): A valuable byproduct of copper mining, contributing to project economics.

Copper Market Overview & Price Action

The copper market experienced a volatile year in 2025. While reaching all-time highs of around $5.80/lb in July due to anticipated US copper tariffs, the price dramatically declined when those tariffs didn’t materialize. Currently (December 17, 2025), copper trades around $5.40/lb. However, the London Metal Exchange (LME) hit an all-time high in November, indicating underlying strength not fully reflected in US Comex futures. This divergence suggests the LME price better reflects fundamental concerns about supply and demand. Ian Harris emphasizes that “Dr. Copper” is a short-term indicator tied to global economic health, particularly China’s.

Drivers of Copper Demand

Several factors are driving increasing copper demand:

• Artificial Intelligence (AI): AI data centers represent a rapidly growing demand driver, potentially reaching 4% of total copper demand. This demand is considered inelastic – Google and other tech giants will pay any price to secure copper for data center construction. Harris notes the speed of AI demand growth is outpacing forecasts.
• Electrification: The global transition to electric vehicles (EVs) and increased electricity consumption are significant drivers. India’s electrification is highlighted as a particularly important emerging demand source.
• Grid Upgrades: Supporting increased electricity demand requires substantial grid infrastructure upgrades, further increasing copper demand.
• Traditional Uses: EVs, new middle classes in developing economies, and general industrial use continue to contribute to demand.

Supply Constraints & Challenges

The copper industry faces significant supply-side challenges:

• Declining Ore Grades: Average copper ore grades have fallen from 1% to 0.3%, requiring the processing of significantly more rock to obtain the same amount of copper.
• Limited New Discoveries: There have been very few significant new copper discoveries in recent years. Only six new copper mines of significant size have been built in the last decade.
• Long Project Lead Times: Developing new copper mines is a lengthy process (10-20 years from discovery to production).
• Geopolitical Risks: Production disruptions in key copper-producing regions (Congo, Panama, Grasberg) are exacerbating supply concerns.
• Permitting Issues: Obtaining permits for new mining projects is increasingly difficult and time-consuming.
• High Costs: Codelco, the world’s largest copper producer, is facing rising costs, hindering expansion plans.

Copper Giant & the Makoa Project

Copper Giant is focused on advancing the Makoa copper-molybdenum deposit in southern Colombia. The company’s strategy centers on developing a Tier 1 copper project – a large-scale, high-grade deposit attractive to major mining companies.

• Recent Resource Estimate: A recent resource estimate elevated the Makoa project to over 1.1 billion tons of inferred resources, qualifying it as a Tier 1 asset. The deposit also ranks as the fifth largest molybdenum deposit globally. The resource contains approximately 12 billion pounds of copper equivalent.
• Project Characteristics: Makoa is a near-surface deposit with a relatively high average grade of 0.94%, clean metallurgy (low levels of problematic elements like arsenic), and existing infrastructure (roads, power lines).
• Development Strategy: Copper Giant plans to start with a smaller-scale 30,000-ton-per-day operation to reduce initial capital expenditure, with the potential to expand to a much larger 150,000-ton-per-day operation.
• Next Steps: The company is focused on continuing exploration drilling, expanding the resource, and completing a Preliminary Economic Assessment (PA) by August 2026, coinciding with a new presidential inauguration in Colombia.
• Strategic Partnerships/M&A: Copper Giant is open to strategic partnerships or a potential acquisition, but believes a higher valuation is necessary to attract favorable terms. Frank Jster, the company’s largest shareholder, is actively supporting the project.

Valuation & Investment Potential

Harris believes copper equities are undervalued relative to the fundamental strength of the copper market. He emphasizes that owning the resource (i.e., investing in copper mining companies) is more valuable than simply holding the metal itself, especially given the scarcity of new projects. He notes that comparable Tier 1 projects are valued at approximately $0.01 per pound of copper in the ground, while Copper Giant currently trades at $0.02-$0.03 per pound, suggesting significant upside potential. Reaching a $100 million market capitalization is seen as a key catalyst for attracting institutional investment and strategic partners.

Notable Quotes

• Ian Harris: “AI is this beast that says it's a race. And Google is fighting with OpenAI… It's a battle of nations. So you cannot lose. So it's I don't care what it costs, get it for me kind of kind of kind of attitude.”
• Ian Harris: “As soon as you run out of copper, there's no really above ground inventory sitting around. And it affects the growth of nations.”
• Ian Harris: “You have to in to build more mines, you need a $9 copper price.”

Synthesis & Conclusion

The copper market is poised for significant price increases driven by a confluence of factors: surging demand from AI and electrification, dwindling supply due to declining ore grades and limited new discoveries, and geopolitical risks. Copper Giant, with its Makoa project, is strategically positioned to benefit from this favorable environment. The project’s Tier 1 status, favorable characteristics, and experienced management team make it an attractive investment opportunity. The company’s focus on de-risking the project and achieving a higher valuation will be crucial for attracting strategic partners and unlocking its full potential. Investors should closely monitor the progress of the Makoa project and the broader copper market dynamics.