Tuesday 21 July 2026
Copper prices exceeded US$13,000 per tonne in January 2026, briefly touching US$14,500 intraday, the highest levels ever recorded. By June, COMEX copper reached US$6.67 per pound. The IEA's Global Critical Minerals Outlook 2026, released on 16 July, confirmed what the price action has been signalling for months: a structural supply deficit of approximately 25% is projected by 2035, narrowed from 30% in last year's outlook as new projects advance, but still vast by any historical standard.
The price story dominates headlines. The midstream story, less visible but equally consequential, is restructuring how copper moves from mine to market.
Classification and origin
Copper is classified as a critical mineral by Australia, the US, the EU, and the IEA. It is the foundational metal of electrification. Electric vehicle motors, power grid infrastructure, renewable energy systems, data centre cooling, and defence electronics all depend on copper in volumes that scale directly with every transition target.
Primary copper ore types include porphyry deposits (the bulk of global production, typically 0.3-1.0% Cu), volcanic-hosted massive sulphide (VHMS), iron oxide copper-gold (IOCG), and sediment-hosted stratiform deposits. Australia hosts globally significant examples of each. Olympic Dam is the world's largest known IOCG deposit. The Gawler Craton, the Lachlan Fold Belt, and the Mt Isa Inlier are the primary copper provinces, with porphyry and IOCG styles dominating the resource base.
The smelter squeeze
This is the story the IEA report puts into sharp focus. Since 2005, China has accounted for over 90% of global copper smelter output growth, raising its share from roughly 15% to 50% of global refining capacity by 2025. That expansion has far outstripped growth in copper concentrate supply from mines.
The result: annual benchmark treatment and refining charges (TC/RCs), the fees smelters earn for processing concentrate into refined copper, settled at US$0 per tonne for 2026. This is the lowest level ever recorded. Spot TC/RCs have been negative since 2024, meaning smelters are effectively paying to access feedstock.
A smelter that earns nothing on processing fees survives only on by-product revenues (gold, silver, sulphuric acid) and cathode premiums. Chinese smelters agreed to cut output by over 10% in 2026, and the government halted approximately 2 million tonnes of planned new smelting capacity. The IEA's assessment is direct: those measures are not enough to meaningfully balance the market. Large-scale closures are unlikely given China's status as a net importer of refined copper, but the economics for non-Chinese custom smelters are increasingly untenable.
Custom smelters buy concentrate on the open market at prevailing terms. Without the cost advantages, scale, and state support that Chinese smelters access, they face prolonged margin compression, potential production cuts, and in some cases closure. Every smelter closure further concentrates the refining chain, deepening the very supply security concern that governments are trying to address.
Australian deposits and active programmes
Australia is the world's second-largest holder of copper resources. BHP's Copper South Australia province, encompassing Olympic Dam, Carrapateena, and Prominent Hill, represents the largest integrated copper production complex in the country. BHP has publicly discussed ambitions of reaching 1 million tonnes per annum from the province by the late 2030s. The Prominent Hill shaft expansion (US$0.9 billion, completion H2 FY27) and the Carrapateena block cave development are both advancing toward that target.
Beyond the majors, the exploration pipeline is active. Copper-focused exploration spending increased 8% in 2025 while most other commodities declined, per the IEA. The Gawler Craton remains the most prospective IOCG province globally, with BHP's Oak Dam prospect under active evaluation as a potential fourth mine in the South Australian portfolio. Across the Lachlan Fold Belt and Mt Isa Inlier, both brownfield extensions and greenfields programmes are competing for experienced geologists capable of working in porphyry and IOCG systems.
The talent demand link
Copper is not a commodity where Australia can afford to sit on its resources. Every expansion at Olympic Dam, every block cave transition at Carrapateena, and every new discovery in the Gawler Craton needs geologists who understand the ore systems, field technicians who can handle core from deep diamond drilling programmes, and competent persons who can sign off on resource estimates that meet JORC (2012) requirements.
The IEA's 25% deficit projection means more upstream exploration, not less, and the concentrate shortage adds urgency. If the midstream cannot keep pace with demand, the upstream response is to prove up more deposits, accelerate resource definition, and bring new concentrate supply to market. That requires people in the field.
At Norwest Exploration and Mining Services, we deploy geologists and field technicians into active copper programmes across Australia, matched to the ore system, the programme timeline, and the operational requirements of each site.
Copper prices have never been higher. The processing chain has never been under more structural pressure. Where does Australia's copper exploration workforce sit relative to the scale of what needs to be built?