Demand for the metal is increasing fast as a key component in green energy transitioning
China is planning a major expansion of copper mining in Serbia as demand for the metal, which is crucial for global energy transition, is expected to overrun supply. The global race to produce materials and control supply chains vital to the green-energy transition has intensified, with China becoming the world’s top-supplier of numerous critical minerals. Copper is used in wind turbines, power grids and electric vehicles.
Zijin Mining Group, China’s largest gold miner and one of the country’s top copper producers, is due to boost the extraction of copper in its Cukaru Peki copper and gold mine in Eastern Serbia. The company opened the Cukaru Peki works about two years ago and has already invested US$678 million to bring the pit into operation. Now China wants to drill further down, almost two kilometers, to reach more reserves.
Branko Rakocevic, the top Serbian official at the mine has stated in media that “These are vast reserves, which require additional infrastructure and additional investment of around US$3.5 billion to US$3.8 billion.”
The mine, located in the eastern Bor region, is divided into an upper and a lower zone. Production at the upper area reached 111,000 tons of copper and 152,000 ounces of gold last year. Its projected capacity is estimated at 91,400 tons of copper and 2.5 tons of gold annually, with potential peak outputs of 135,000 tons of copper and 6.1 tons of gold.
Once both zones reach their full capacity, the Cukaru Peki mine is likely to result in Serbia becoming Europe’s second-largest copper-producing country. The Skouriotissa Mine in Nicosia, Cyprus is Europe’s largest.
Rakocevi added that “Copper is in always in demand on a global basis, which justifies the long-term investment. The market is stable. Prices declined from last year, but we don’t expect much volatility.”
According to McKinsey, the world’s transition to a greener economy will boost annual copper demand to 36.6 million tons by 2031. Supply is predicted to hit around 30.1 million tons by the same year, from the current 22 million tons, creating a 6.5-million-ton shortfall at the start of the next decade.
Serbia is not part of the European Union and instead has a Free Trade Agreement with the Eurasian Economic Union, (EAEU) which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. China also has a non-preferential FTA with the EAEU, an agreement kept deliberately loose to enable Beijing to negotiate tariff reductions on an as need basis.
China and Serbia started the negotiations for a free trade agreement in April 2023. Serbia is China’s major trading partner in Central and Eastern Europe. In 2022, bilateral trade grew 10.1% year-on-year to US$3.55 billion.
Source: See Mining
Sign up for business updates & specials.
