Geopolitical turmoil is making copper a national security issue, US veteran says

Investing.com -- A confluence of geopolitical pressures, supply chain constraints, and accelerating demand from electrification and defense is reshaping how governments and investors think about copper.

According to a January 2026 study by S&P Global, global copper demand is projected to reach 42 million metric tons by 2040 — roughly 50% above current levels — while existing supply is poised to decline in the coming years as the mining sector faces compounding challenges across the value chain.

The White House designated copper a critical material essential to national security in February 2025, citing dependence on foreign sources and the risk of foreign market manipulation.

The supply base is also heavily concentrated. Six countries account for approximately two-thirds of global mining production, while China controls around 40% of smelting capacity, the study showed.

Earlier this month, China announced its decision to ban sulfuric acid exports effective May 2026, which puts an estimated 200,000 tons of Chilean copper production at risk, translating to 1% of global supply, according to Goldman Sachs.

Now, the ongoing instability in the Middle East is compounding already tight conditions across industrial metal supply chains, stoking uncertainty around the energy inputs and mineral flows that grid expansion and electrification depend on.

Commander Phil Ehr, a former U.S. military commander and now an Advisory Board Member at NovaRed Mining, spoke with Investing.com about what these developments mean for supply chain resilience, government policy, and the long-term demand outlook for the metal.

With the Strait of Hormuz disruption already rippling through energy and commodity markets, how real is the risk that copper supply constraints start translating into tangible national security consequences in the near term?

“The risk is real, and it is becoming more immediate. Copper is not just another commodity. It is embedded in power systems, communications, transportation, and defense infrastructure. Roughly three quarters of copper demand is tied to electrical uses, so when supply tightens, the impact appears quickly in areas that matter for both the economy and national security.

We are already seeing signs of strain. Prices are elevated across COMEX, the London Metal Exchange, and Shanghai, which indicates this is not a localized issue. It is a global market under pressure, with the United States paying a noticeable premium.

At the same time, the underlying inputs that support copper production are tightening. Diesel availability is a major factor because it powers mine fleets, transportation, and logistics. If diesel supply declines or becomes more expensive, the cost of moving ore and refined metal rises quickly.

There are also constraints on key processing inputs such as sulphuric acid, along with higher freight and operating costs being flagged by major producers.

When all of these factors are combined — including higher metal prices, tighter fuel supply, and constrained inputs — the situation moves beyond a typical commodity cycle. The implications begin to affect energy reliability, industrial capacity, and ultimately national security.”

How do you see sustained geopolitical instability — not just the current Middle East situation, but as a longer-term pattern — changing the way governments prioritize domestic critical mineral production?

“What we are seeing is a shift from prioritizing lowest cost to prioritizing reliability. In a more volatile geopolitical environment, governments are asking a different question. Instead of focusing only on where resources are cheapest, they are asking whether supply can be relied upon when it matters most.

The current situation is reinforcing that shift in real time. It is not just about mining. It involves the entire supply chain, including fuel availability, shipping costs, refining capacity, and power prices. When those variables become less predictable, dependence on external supply begins to look like a clear vulnerability.

There are already visible signs of stress across energy markets, including refining adjustments, higher bunker fuel costs, and rising electricity prices in key industrial regions. This combination highlights how interconnected the system has become.

As a result, governments are increasingly likely to treat domestic mineral production as part of strategic infrastructure. The focus is on resilience — ensuring the ability to build, power, and maintain critical systems even when global supply chains are under pressure.”

Could an energy crisis of this scale end up being a demand accelerant for copper in the long run by accelerating the push toward renewables, grid buildout, and reshoring?

"In the short term, an energy shock can slow economic activity. However, over the longer term, it often drives increased investment, which is where copper demand becomes more significant.

When governments respond to instability, they tend to build additional capacity. This includes stronger grids, expanded transmission networks, backup systems, local generation, and domestic manufacturing. All of these developments require significant amounts of copper. While the immediate effect is higher costs and tighter supply, the longer-term outcome is often increased demand.

We are already seeing where this demand is emerging. Power infrastructure, construction, and data centers are all contributing. Even in markets where pricing signals appear mixed, physical demand indicators such as import premiums suggest underlying strength.

At the same time, rising input costs — including fuel and freight — are exposing how fragile parts of the system can be. This environment encourages policymakers to focus on diversification, reshoring, and infrastructure investment.

As a result, a disruption of this scale can accelerate long-term copper demand. It creates pressure in the near term, but it also drives the structural investment that increases consumption over time."