New McKinsey report finds circular copper recovery could bridge critical supply gap

As the global energy transition accelerates, demand for copper – a critical material in renewable energy, battery storage, and electricity transmission – is rising sharply. However, according to McKinsey’s latest report, Chasing the Lost Copper: Global Scrap and its Role in Decarbonization, the industry could face a 3.6 million Mt shortfall in refined copper by 2035, putting supply chains under increasing strain. The report highlights that increasing circularity in copper recycling will be essential for both supply security and emissions reduction.

Despite scrap’s growing importance in the copper value chain, 40% of postconsumer copper scrap will not enter official recycling channels either because they are not collected or are only processed informally. This represents an estimated 7.8 Mt of lost material by 2035. However, the report notes that 20 – 25% of scrap remains truly uncollected, equating to 4.1 – 4.9 Mt of potentially recoverable materials. Capturing even part of this volume could provide a crucial supply source to help address shortages while lowering emissions. Yet, as the report highlights, realising this potential will require investment in collection and smelting infrastructure, regulatory support and stronger cross-industry collaboration.

Today, the total refined copper supply only contains about 20% postconsumer scrap. McKinsey projects this share is expected to increase to 25% by 2035. However, current collection and processing limitations prevent the industry from integrating more of the copper scrap arising each year.

The report finds that recycling presents one of the most effective pathways to decarbonisation, given that postconsumer scrap is a low-carbon feedstock. This is because two-thirds of total copper emissions originate in the mine site during primary copper production. Copper postconsumer scrap bypasses these most energy-intensive stages of production as it has already been extracted and processed. By scaling copper recycling, the industry could significantly reduce emissions while simultaneously strengthening long-term supply stability.

Peter Spiller, Partner, McKinsey, says:

“Copper is essential for the energy transition, yet factors including supply constraints threaten to slow progress and uptick market uncertainty. As the industry looks to scale circularity, expanding formal collection networks, investing in secondary smelting capacity, and securing long-term scrap supply agreements will be critical. Capturing lost copper through improved recycling processes is not just an environmental imperative – it’s an economic opportunity for the industry.”

With global demand for refined copper projected to grow from 29.5 Mt in 2025 to 37.3 Mt by 2035, the race is on for players across the value chain – copper producers, OEMs, refiners, and policymakers – to build sustainable circular supply chains and secure long-term access to secondary copper sources. Industry leaders who invest in circularity today will be best positioned for the future. 

Read the article online at: https://www.globalminingreview.com/finance-business/05062025/new-mckinsey-report-finds-circular-copper-recovery-could-bridge-critical-supply-gap/