LS Group secures large-scale copper concentrate purchase contracts

[Courtesy of LS Group]

South Korea’s LS Group has recently signed a series of large-scale copper concentrate purchase contracts amid intensifying competition to secure copper, a key resource in the era of artificial intelligence (AI).

According to industry sources on Monday, LS MnM Inc., the non-ferrous metals unit of LS Group, has secured a 10-year contract in April to procure 1 million tons of copper concentrate annually from the Centinela mine in Chile.

The company also concluded its largest-ever contract with Australian mining company BHP Group Ltd. in May, securing a total of 1.73 million tons of copper concentrate over 5 years, approximately 350,000 tons annually.

Copper concentrate is a powdered form of copper ore mined from mines, where impurities are removed to create a refined copper ore powder with a purity of 99.99 percent, which is essential for producing electrolytic copper.

With the latest contracts, LS MnM has secured over 1.6 times the annual import quantity of 1.7 million tons.

LS MnM is the only copper refining company in Korea and is responsible for a majority of domestic demand for electrolytic copper.

Copper boasts high thermal and electrical conductivity and is easily processed, making it versatile in various applications.

Demand is expected to surge due to the expansion of data centers, eco-friendly power grids, and the spread of electric vehicles (EVs)

“While an internal combustion engine vehicle uses about 20 kilograms of copper, an EV requires up to 80 kg,” said an industry insider. “It takes about 3 tons of copper to produce one wind turbine.”

The challenge lies in the discrepancy between rapidly increasing copper demand and slow supply growth. There has been minimal development of copper mines in the past decade due to concerns over environmental pollution and escalating development costs, resulting in stagnant supply.

According to the International Copper Study Group, copper supply is expected to increase by a mere 0.5 percent in 2024.

“Without stable copper supply, key industries in Korea such as AI semiconductors, EVs, and renewable energy could lose momentum,” said Baek Jin-soo, head of LS MnM‘s raw materials division.

He emphasized the importance of stable copper supply, noting that “long-term procurement of copper is crucial.”

Other countries are also scrambling to secure copper. The United States is in the process of acquiring a $3 billion stake in a Zambian mine after designating copper as a national critical mineral in 2023.