In the wake of recent copper shortages and expected price hikes, there is a need for Africa to hold a key interest. A recent forecast by the Bank of America predicted a jump in the price of Copper. According to the statistics, Copper is expected to hit a record high of $20,000 per metric ton by 2025.
Strategist at the bank, Michael Widmer said that “If our expectation of increased supply in secondary material, a non-transparent market, did not materialize, inventories could deplete within the next three years, giving rise to even more violent price swings that could take the red metal above $20,000/t ($9.07/lb).”
Comparing recent price changes to future expectations, Widmer predicted that, due to growing demand, price of the metal could spike to $13,000/t in the coming years after hitting $10,000 just last week for the first time in a decade.
WHY MUST THIS CONCERN AFRICA?
The African continent contributes greatly to the world’s copper market; the likes of the Democratic Republic of Congo (DRC), Zambia, South Africa among others have been active producers over the years.
On the global level, the Democratic Republic of Congo has been among the lead producers of copper in the whole world; currently, the Central African country has been rated the fourth highest Copper producer in the world ahead of the United States of America. The DRC holds such position with 1.3 million tonnes; the country improved its production base from 1.23 million metric tonnes in the year 2018 to 1.3 million tonnes in 2020.
The concern here is: How well-positioned is Africa, especially the DRC to benefit from this expected market spike? A worrying trend is the rate at which Copper, Cobalt and other resources are illicitly transported out of these countries by some multinationals and locals, causing financial loss. Additionally, the unfair mining agreements between multinationals and these countries is another area that has drained national revenue. With the expected future demand, more attention must be paid to these loopholes.
Moreover, a major aspect that needs to be addressed in terms of Copper production, particularly in the DRC is how revenue generated from these resources can be utilized to drive development. Over the years, the DRC’s resource reserve has not really reflected in the lives of the people due to corruption, unfair distribution, and exploitations by multinational companies.
The authorities must leverage on the current and expected price hikes to push for development.