“The world needs more high-quality copper, but it is getting harder to find and produce. At the same time, the end consumers of copper-intensive products, such as those people buying electric vehicles (EVs), are more ethically minded, and care more about how their vehicles are made and exactly what they are made with.
“Making sure we are mining in the right way is fundamental,” Mr Malchuk said.
If the forecast strong take-up of EVs eventuates copper producers will be major beneficiaries, because an EV has about four times as much copper as a conventional car.
According to Mr Malchuk, who has been mentioned as a potential future candidate for the miner’s chief executive position, consumer demand for ethically sourced products presents a challenge and opportunity for the industry.
The automotive and electronics goods sectors were already asking about the sustainability of the supply chains of the copper used.
“Consumers care and they speak with their wallets…Sooner or later, the owner of an electric vehicle will want to know exactly what is in their car, and be guaranteed that it meets certain environmental standards. This is what the concept of ‘green copper’ is all about,” he said.
In an interview with The Age and Herald, Mr Malchuk said the worldwide push for decarbonisation was “a megatrend” that would stoke demand for copper, while on the supply side high quality copper was becoming harder to find and extract.
“There are enough examples in other industries where consumers want to know exactly how that product has been produced…Consumers are now getting a lot more sophisticated and they want to know exactly what happens, what sort of power was used, (information about) use of water,” he said.
“We need to accept that in the current world, that society demands higher standards and more transparency,” he said.
BHP has indicated publicly that it is very keen to grow its copper business, and has an active exploration program in different jurisdictions.
ANZ senior commodity strategist Daniel Hynes said copper had a positive outlook in the short and longer term. “Longer term, we are starting to see the early signs of new end-use demand sectors emerging, which we do think will replace some of the sectors which have seen growth start to wane a little bit over recent times,” he said.
Darren is the mining and agribusiness reporter for The Age and The Sydney Morning Herald.