USGS appears to not have updated the copper supply risk score with updated data – or chose not to release an updated score. Instead, USGS used facts and arguments outside of its own 2022 methodology and process to justify its decision to forego an out-of-cycle addition of copper to the list as requested by a bipartisan group of senators, congressmen, and governors. Notably, USGS did not refute the CDA study showing copper's supply risk score is now above the 2022 threshold of 0.40.1. USGS undermined its credibility by citing facts that were specifically NOT included in its 2022 methodology:
While copper is clearly an essential mineral commodity, its supply chain vulnerabilities are mitigated by domestic capacity, trade with reliable partners, and significant secondary capacity.
- Domestic capacity was NOT a factor in its 2022 methodology.
- Supply from reliable partners was NOT a factor in its 2022 methodology.
- Significant secondary capacity was NOT a factor in its 2022 methodology.
2. USGS tried to downplay facts that specifically WERE included in its 2022 methodology:
In addition, the observation that more than half of the global supply of refined copper is produced in China, Russia, North Korea, and Iran, while factually correct, is not directly relevant to the copper supply of the United States. Imports of refined copper to the United States are not dependent on any of the countries cited. American imports of refined copper come predominantly from Chile, Canada, and Mexico, reliable trade partners with whom the U.S. has free trade agreements.
- High concentration of copper production in geopolitical adversaries (over half of the global supply of copper is produced in China, Russia, North Korea, and Iran) is a factor as USGS methodology specifically accounts for the willingness of all production countries to supply to the U.S.
3. USGS claims that a new review of copper supply projections points to undiscovered copper around the world and in the U.S.
A study identified 236 areas for undiscovered copper in 11 regions of the world6. Additionally, the USGS Earth Mapping Resources Initiative (Earth MRI) has included areas permissive for copper deposits with the potential to host critical minerals as potential targets for geophysical, geochemical, and geologic mapping, with southeastern Arizona and western Utah among the focus areas for new mapping in 2023.
However, none of this potentially, yet to be discovered and mined copper is proven to be technically or economically feasible or if those resources could be mined because of geopolitical, technical, or permitting roadblocks.
4. USGS implies that recent imports of copper only rose because of COVID-related supply chain disruptions.
The most recent data for copper supply chain indicates a significant disruption at the start of the pandemic and a subsequent rebound. Copper imports to the United States are predominantly refined copper. Imports of refined copper increased in 2021 but then decreased significantly from 2021 to 2022. The relatively high level of imports in 2021 appears to represent a rebound from much lower imports in 2019 and 2020 during the height of the COVID-19 pandemic. The pandemic had large, broad impacts on many mineral commodity supply chains which are only now returning to pre-pandemic levels.
However, a sharp rise in imports began in 2019 before the U.S. declared COVID a pandemic in January 2020. A 41% net import reliance in 2022 is still high and dangerously reliant on foreign supply. In addition, as pointed out in the CDA study, when USGS' erroneous use of scrap it included in its refined copper consumption calculation is stripped out, U.S. import reliance is actually estimated at 48% in 2022.
5. USGS states that copper's supply risk needs to take into account the most recent data for all mineral commodities.
The consultant report sponsored by the Copper Development Association5 (CDA) states that, based on more recent data, the recency-weighted supply risk for copper now exceeds the 0.40 threshold used for inclusion on the 2022 list of critical minerals. An important difference between the USGS and CDA analyses is that the USGS incorporates the most recent data for all mineral commodities into the model simultaneously, instead of analyzing potential changes for a single commodity. This requirement ensures that the model incorporates structural changes in commodities markets or supply chains that may have occurred since the last update, even those that have not (yet) affected the copper supply chain.
However, the 2022 scoring of each mineral was independent from each other. The mining, refining, and recovery of all minerals on the list are not interdependent. Should co-dependency be added as a criterion for evaluation, copper would likely rank even higher as it is the gateway to multiple minerals already on the list. However, since this would be a new criterion, is the 0.40 threshold score a moving target that could change once all commodity scores are compared in 2025?
6. Finally, USGS uses the further excuse that the U.S. supplies one third of domestic copper consumption through recycling, which mitigates copper's supply risk.
Finally, the United States supplied about a third of its domestic copper consumption requirements from recycling in 2022, a good example of the potential for secondary production to mitigate supply chain risks.However, scrap has historically always provided one third of the total copper supply, so that cannot be relied upon to mitigate a future supply disruption. In addition, if consumption goes down because of refined copper supply disruptions, then new scrap supply would also decline proportionately.