In this episode of “Metals in Motion,” Steven Schoffstall, Managing Partner and Head of ETFs at Sprott Asset Management, discussed the fundamental transformation that’s currently occurring in the global copper market. Copper is likely no longer just an industrial metal that has cyclical appeal, but a critical mineral with strong growth prospects.
The proliferation of disruptive technologies like artificial intelligence (AI) is helping to support copper’s investment case. The picks and shovels trade regarding AI’s infrastructure buildout could spur heavy demand for the red metal.
Electrification in the Digital Age
In the video, Schoffstall theorized that data centers will require significantly more power and thus, spike electricity demand. In turn, this requires more copper compared to traditional facilities. The dense power requirements of specialized chips and the massive electrical infrastructure support the investment case for copper. As Schoffstall noted, copper could essentially become the “connective tissue” as the digital age evolves.
“Copper is really the connective tissue for everything we’re seeing in the modern economy, from the build-out of AI data centers to the massive electrification of the global grid,” Schoffstall said. “You simply can’t have a digital or green future without it.”
Schoffstall also noted that green energy would also help drive copper demand. Electric vehicles (EVs), solar panels, and wind turbines require copper-intensive applications during manufacturing. Additionally, grid modernization is a necessity given these new power demands, which will require millions of miles in new copper wiring.
Forthcoming Supply Constraints
Meeting the demand for additional copper is not a case of simply mining for more. Schoffstall noted that an average of 15 to 20 years is the time investment necessary to bring a new copper mine from discovery to production. With current production’s inability to keep pace with current demand, a structural deficit could persist for decades. Furthermore, geopolitical tensions and tariffs are leading to fragmented pricing, where secure, domestic, or “friendly” supply chains command a premium.
“It takes about 15 to 20 years to bring a new copper mine from discovery to production,” Schoffstall noted. “When you look at the demand coming from AI and the energy transition, we are looking at a supply-demand gap that is almost impossible to fill with the current projects in the pipeline.”
Investing in the Copper Ecosystem
To capture the future upside potential in copper, Schoffstall suggested investors to look beyond physical copper. Opportunities in the mining ecosystem are available in the Sprott Copper Miners ETF (COPP).
The fund provides exposure to physical copper, which can provide closer tracking to the metal’s spot price. COPP also adds mining exposure by tracking the Nasdaq Sprott Copper Miners Index (NSCOPP). The index tracks the performance of a global selection of copper‑focused securities, including copper producers, developers, and explorers. That likely adds to the fund’s potential diversification benefits and speaks to its pure-play exposure.
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Disclosures
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
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