Copper at New Highs as AI and Electrification Fuel Demand

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June 3, 2026 | (8 mins 41 secs)

Copper is powering the technologies shaping the future, from AI data centers and electrification to renewable energy and defense. Watch as Sprott ETF expert Steve Schoffstall explains why rising demand, constrained supply and long mine development timelines could create compelling opportunities for copper investors.

Video Transcript

James Connor: Steve, thank you very much for joining us today. You head up ETFs at Sprott, and you and your team have created two ETFs that allow investors to focus on copper miners. Before we examine these products in more detail, let's start with the investment thesis behind copper. Why should investors care about copper?

Steve Schoffstall: Copper is one of those metals that touches nearly every aspect of modern life. It really is imperative to the overall way that we've structured the global economy. Whether it's electrical infrastructure, energy generation, technology, defense or real estate, these are all aspects of the economy that rely heavily on copper. Basically, any time that you see that electricity is being moved or stored, you'll generally find that copper is in the middle, making all of that possible. From that standpoint, it's one of those metals that has a very profound impact on how our society functions.

James Connor: One of the stats I always love to talk about is the fact that in a traditional car, there are 50 pounds of copper, give or take, depending on the car. But in your typical EV, there's 150 pounds of copper, so the demand for it just keeps going up.

Steve Schoffstall: That's right. Energy transition and electrification are two aspects of the economy that use significant amounts of copper, far more than their fossil-fuel counterparts. Even outside of EVs, you start looking at how the energy is generated. Things like solar and wind, depending on the type of application, can use anywhere from 2.5 to 7 times as much copper as their fossil-fuel counterparts. As we're looking to improve our electrical infrastructure and explore renewable energy sources, copper is becoming increasingly important.

James Connor: Copper is trading at or near all-time highs, and it's doing so at a time when other metals, such as gold and silver, are under pressure. But what's driving this demand? You touched on a couple of points, but you could elaborate on them.

Steve Schoffstall: The demand for copper is changing. Because of that, we're seeing strong copper demand from data centers, artificial intelligence, defense, energy transition and electrification. If you look at those categories, they currently account for around 32% of copper demand. By 2040, it's expected to be about 45%.

Just to put it in context, those structural demand drivers accounted for over $5.5 trillion in spending last year alone. Very significant structural demand that didn't really exist a decade ago, as electrical grids weren't expanding at the rate they are now to meet the power-hungry needs of these applications.

James Connor: The other issue we must discuss is the supply side of the equation. Copper supply has been hampered in recent years. We've seen many mining disruptions worldwide. But can you speak to this?

Steve Schoffstall: Disruptions are nothing new to copper mining and mining in general. When you think about the overall rate of disruption for copper miners, it's somewhere around 5% per year on average. Several large mines have experienced disruptions over the last 12 to 24 months. The Cobre Panama mine in Panama was set to produce about 1.5% of global copper output. That mine has been closed due to a dispute with the Panamanian government.

The Grasberg mine in Indonesia suffered a mudslide last year. This was the second-largest producing copper mine in the world. The expectation is that it will return to full capacity by 2027 or 2028. A very significant amount of copper has come offline. The Kamoa-Kakula mine in Congo, the world's fifth-largest mine, experienced seismic activity. It's impacted the amount of copper being produced, and we're seeing those projections continue to come in below expectations for how quickly it will return to production. These large copper mines are having supply disruptions. At the same time, we're seeing this increase in copper demand.

James Connor: It makes you realize how fragile the entire system is.

Steve Schoffstall: It is. What's really compounded this issue is not only the disruptions, but also the difficulty of increasing new supply. We're not having the same level of what we would call significant copper mines being discovered. Also, the time to get a new copper mine from discovery to production, depending on jurisdiction, can take 15 years or longer. In some cases, we've seen it take 30 years to get some of these mines up and running. Not only do we have demand factoring into this, but we also have supply disruptions, declining ore grades and a lack of major discoveries. All of these are setting up a longer-term supply-and-demand imbalance, which we think will benefit copper miners.

James Connor: Why don't we move on now and discuss Sprott's Copper ETFs, beginning with the Copper Miners ETF?

Steve Schoffstall: We launched the Sprott Copper Miners ETF (ticker: COPP) a few years ago. This is significantly different from what we're seeing from other offerings in the market. Perhaps the biggest difference is its focus on pure-play copper miners. We define a pure-play company as one with at least 50% of its revenue tied to mining copper. This pure-play aspect of COPP is unique to this product.

Another unique feature of COPP is its dedicated allocation to physical copper. About 5% of COPP is allocated to physical copper. The significance of pure-play is that it really reduces the unintended exposures that you might get from some other competing strategies. Because of that, we've seen investors really gravitate toward COPP.

James Connor: How many mines globally would fall under this category of pure-play?

Steve Schoffstall: When we look at the number of miners, we're right around 60, give or take a few. It's got a nice diversified base. You'll see that about 75% would be considered large-cap, though it also has some mid- and small-cap exposure, as well as the physical exposure we discussed. You have an all-cap exposure in a single ticker.

James Connor: The second product that you and your team have created is the Sprott Junior Copper Miners ETF. Tell us about this product and how it differs from the other product you mentioned.

Steve Schoffstall: The Sprott Junior Copper Miners ETF is ticker COPJ. Again, this has a pure-play strategy. We really believe in pure play and in our product development process at Sprott. This will focus on smaller junior and development-exploration companies. The portfolio has about 50 different securities. The main difference you're going to see is that it is a junior mining ETF, so it's going to focus on small-cap names, with about 75% in small caps. The rest of that will fit in mid-cap names. No large-cap exposure here, and also no physical copper exposure in COPJ.

James Connor: This has been a great overview, Steve, and I want to thank you very much for taking the time with us today and for sharing your insights. As we wrap up, if investors would like to learn more about Sprott and its various products, where can they go?

Steve Schoffstall: They can go to Sprottetfs.com. There, you can learn about each of the funds we talked about today, as well as our other critical materials and precious metals ETFs. I would also have investors check out our Insights section. There, you can access all of our research. It's not behind a paywall. You don't have to put in your email address. We produce our monthly commentaries. We produce webcasts and a podcast in-house. Lots of information is available to investors on copper and other critical materials, as well as precious metals markets.

James Connor: Steve, once again, thank you.

Steve Schoffstall: Thank you. Great to be here.