A copper deficit on a chart is not a mining return

themePublished 19 October 20263 min readcommodities, equities

Key points

• The IEA says the projected copper supply deficit in 2035 has narrowed from around 30 percent in the previous outlook to 25 percent, as projects advance in the Democratic Republic of the Congo and Zambia.
• That 25 percent is a projection to 2035, not a shortage measured today.
• Spending by copper-focused companies rose 8 percent in 2025, while critical-mineral investment overall fell 9 percent.
• Benchmark copper smelter fees were settled at zero dollars per tonne for 2026. That is a treatment charge, not the copper price.

What is going on

The report page is dated 16 July 2026 and marked CC BY 4.0. The executive summary, read on 19 October 2026, says supply adequacy remains a major concern, notably for copper. It says prices for base metals such as aluminium, copper and tin rose by one-third between January 2025 and April 2026, and that copper prices reached record highs. It does not print the dollar price, so this note does not either. On the project pipeline, it says supply deficits for copper and lithium are set to persist through 2035, and that the projected copper deficit in 2035 has narrowed from around 30 percent in the previous outlook to 25 percent. Spending by copper-focused companies increased by 8 percent in 2025. Exploration spending on copper was described as steady, inside an overall exploration decline of more than 10 percent. Latin America and the Caribbean account, on the IEA's account, for around 40 percent of global copper mine output.

Why it matters

A narrower projected deficit means the IEA's pipeline improved. It does not mean the gap closed, and it does not name a rate of return. New tonnes from the Congo and Zambia still have to be financed, built, powered and, often, smelted somewhere else. The summary says China has accounted for over 90 percent of growth in global copper smelting since 2005, taking its share of global smelting capacity from around 15 percent to 50 percent by 2025. Utilisation fell below 70 percent outside China by 2025 and stayed around 85 percent in China. Benchmark smelter fees at zero dollars per tonne in 2026, with spot charges negative since 2024, mean the processing step is being paid differently from the old treatment-charge model. A mine and a smelter do not share that squeeze.

What to watch

The thesis of a lasting physical gap would weaken if the 2035 deficit were revised away, if scrap rose faster than the IEA's recycling path, or if substitution and thrifting cut the tonnes per unit of electrical equipment. The IEA says average recycling rates across key energy minerals could rise from around 10 percent today to close to 20 percent by 2040 under today's policies, and that copper already has a relatively established recycling stream. A higher price that pulls that scrap forward is a supply response, not a confirmation that every miner earns more.

Risks

Record prices can coincide with project delays, political risk and a cost base that rises with the price. Deal activity is not a return: the IEA says demand for high-quality copper assets helped drive a 20 percent increase in overall critical-mineral deal value in 2025 versus 2024. That is the value of transactions, not the profit of the assets. A projected 25 percent gap can also be wrong because the demand path is wrong. This note does not choose a price at which the gap clears.

Why the equity is a different object

A copper future tracks a contract. A miner tracks ore, costs, the currency of the cost base, tax and the time until the project produces. A smelter tracks concentrate supply and fees. A cable maker tracks the 10 to 15 percent of transformer and power-cable prices that the IEA attributes to copper, and all the other costs. Strong demand can raise revenue and still leave the return on new capital below the hurdle if the new tonne is expensive. The thematic-risk note on this desk walks through that arithmetic as a worksheet.