South Korea’s LS Group Secures Major Copper Concentrate Contracts Amid Rising Demand
South Korea’s LS Group has recently finalized significant copper concentrate purchase agreements, reflecting the increasing competition to secure this essential resource in the artificial intelligence (AI) era.
LS MnM Inc., the non-ferrous metals unit of LS Group, has signed a 10-year contract in April to procure 1 million tons of copper concentrate annually from the Centinela mine in Chile. Additionally, in May, the company secured its largest-ever contract with Australian mining company BHP Group Ltd., obtaining a total of 1.73 million tons of copper concentrate over five years, or approximately 350,000 tons annually.
Copper concentrate, a powdered form of copper ore, is refined to create a high-purity copper powder essential for producing electrolytic copper. With these new contracts, LS MnM has secured more than 1.6 times its annual import quantity of 1.7 million tons.
As the only copper refining company in South Korea, LS MnM supplies the majority of the domestic demand for electrolytic copper. Copper's high thermal and electrical conductivity and its ease of processing make it versatile for various applications. Demand for copper is expected to surge with the expansion of data centers, eco-friendly power grids, and the proliferation of electric vehicles (EVs). An internal combustion engine vehicle uses about 20 kilograms of copper, whereas an EV requires up to 80 kilograms. Additionally, approximately 3 tons of copper are needed to produce one wind turbine.
However, the challenge lies in the discrepancy between rapidly increasing copper demand and the slow growth of supply. Over the past decade, minimal development of copper mines due to environmental concerns and rising development costs has led to stagnant supply. The International Copper Study Group projects a mere 0.5 percent increase in copper supply in 2024.
Baek Jin-soo, head of LS MnM’s raw materials division, emphasized the critical nature of stable copper supply, noting that long-term procurement is crucial to support key industries in Korea, such as AI semiconductors, EVs, and renewable energy. Without a stable copper supply, these industries could lose momentum.
Globally, other countries are also striving 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.
