ASX developers spring into action as copper supply gap looms

Copper is shaping up as one of the standout commodities of the year, having bolted nearly 50% in the past twelve months to hover near all-time highs.

But the future of the metal could be just as bright, with a growing body of research pointing to a structural supply shortage in the longer term.

S&P Global recently forecast copper demand to reach 42Mt by 2040, marking a 50% rise from 2025 levels of around 28Mt.

The same study warned that supply could lag by as much as 10Mt without a significant increase in new production.

The International Energy Agency has also projected a 25% supply deficit by 2035.

BHP (ASX:BHP) is positioning itself for this potential supply squeeze, with a series of deals boosting its exposure to the metal.

Copper has already become its largest earnings contributor, accounting for more than half of its FY26 EBITDA.

Rio Tinto (ASX:RIO) has also grown its copper output in recent years.

Beyond the majors, a group of ASX copper players is advancing projects that could form part of the next wave of global supply.

Caravel Minerals (ASX:CVV) and Hot Chili (ASX:HCH) are progressing feasibility studies for their giant porphyry deposits.

Kantra Copper (ASX:KAN) has teamed up with Havilah Resources (ASX:HAV) to advance the Mutooroo project in SA.

Pivotal Metals (ASX:PVT), QMines (ASX:QML), CuFe (ASX:CUF) and True North Copper (ASX:TNC) are also building a pathway to production.

Cannindah Resources (ASX:CAE) could now be on track to join the development pipeline, having lifted its resource to 216,500 tonnes of contained copper equivalent just this week.

The copper crunch

Copper plays a key role in the global economy thanks to its wide-ranging industrial applications across construction, manufacturing, electronics and telecommunications.

It has also emerged as a strategically important metal for the world’s energy transition, thanks to its use in EVs, charging infrastructure, renewable energy and expanding power grids.

Beyond that, copper is becoming indispensable in AI data centres where its superior conductivity supports efficient power distribution and cooling.

These structural trends are converging at once to drive demand.

But meeting that demand could prove to be a challenge, with many established copper mines now mature and facing declining grades.

But bringing new projects online can take years, with significant capital, permitting and infrastructure requirements often causing blockades.

This supply squeeze could be a boon for ASX developers and advanced explorers carving out a path towards potential production in coming years.

“It’s becoming apparent to everyone now that there’s a structural deficit in supply, which is on us right now,” Cannindah Resources managing director Cameron Switzer told Stockhead.

“But it’s going to get even worse.

“There’s no shortage of copper in the world, there’s heaps of copper.

“But it’s access to it, it’s the timeline to extract it, and it’s the cost to get it out which provides the issues and the problems.

“So the long and the short of it is, there will be opportunities for obviously the main suppliers and the big boys.

“But what I think we will see, we’ll see a transition to opportunities for smaller developers and smaller people who have that chance to produce 10 to 20, maybe up to 50,000 tonne of copper metal.

“And they’ll fill that niche market moving forward.”

S&P Global’s projected market deficit for copper. Pic: Kantra Copper

The ASX copper pipeline

Whilst BHP and Rio Tinto cement their place as globally significant copper producers, the next group of ASX developers are looking to capture their own slice of the cake.

Pivotal Metals recently entered the fray after a scoping study for its Horden Lake project in Canada revealed a robust economic profile.

The study outlined a ten-year operation to produce an average of about 25,000 tonnes of copper equivalent annually.

It estimated a post-tax NPV of $920 million, an IRR of 49% and payback period of 1.3 years under a base-case scenario.

The resource at Horden Lake currently stands at 52Mt at 1.05% CuEq. It remains open in multiple directions.

The production target is constrained to a subset of the open-pit resource and excludes the out-of-pit MRE, with about 30% of its NSR derived from inferred resources.

Pivotal will now run a PFS to refine the mine plan and infrastructure requirements, as it looks to advance the asset towards a potential development decision.

The scoping study also provides an annual production profile for Horden Lake, placing Pivotal amongst a group of ASX developers to have quantified their potential copper output.

Leading the pack are the large-scale porphyry assets being advanced by Caravel and Hot Chili.

Projected copper production profile for selected ASX projects. Pic: Pivotal Metals

The porphyry supply engine

Porphyry deposits are large, bulk-tonnage ore bodies that typically contain relatively low grades of copper.

They are the world’s dominant source of copper and can also contain valuable by-products, including molybdenum, gold, silver and tungsten.

Their importance to global copper supply is immense.

Chile is the world’s largest copper producer with more than 20% of output, with much of its copper hosted in porphyry deposits.

BHP and Rio Tinto also both operate major porphyry copper mines.

In WA, Caravel Minerals is finalising a DFS for its namesake porphyry not far from Perth.

It believes the deposit to be Australia’s largest undeveloped copper project, with ore reserves totalling 1.42Mt of contained copper.

A previous economic study outlined more than 25 years of production, with steady-state output of 65,000 tonnes of copper in concentrate per year.

Once the DFS is wrapped up, Caravel plans to progress project financing and potential JV opportunities, with a final investment decision targeted for the end of 2027.

Hot Chili is also advancing a porphyry system at its Costa Fuego project in Chile.

Costa Fuego hosts an indicated resource totalling 798Mt at 0.45% CuEq, plus an inferred 203Mt at 0.31% CuEq, across the Productora, San Antonio and Cortadera deposits.

Last year’s PFS outlined a 20 year mine life for the project, but the nearby La Verde discovery could further enhance its scale and economic profile.

Hot Chili has reported a series of significant intercepts from La Verde, including 529m at 0.56% CuEq and 725m at 0.42% CuEq.

It believes the discovery could improve Costa Fuego’s production profile to between 100,000 and 150,000tpa CuEq over a mine life of 20 to 30 years.

A final investment decision is planned for 2029, with first production targeted for 2031.

The other ASX contenders

Kantra Copper is already an established producer but is also looking to boost its output through the JV at Mutooroo in SA.

In FY26, the company churned out more than 12,000 tonnes of copper at its Kanmantoo mine near Adelaide after ramping up the processing rate to 1.8Mtpa.

A PFS is now evaluating if ore from Mutooroo can be mined, crushed, railed and then processed at Kanmantoo.

Kantra believes the additional feed could lift its copper output beyond 20,000tpa.

Further north, CuFe holds a 55% interest in the Tennant Creek project in the NT.

The asset hosts the historically mined Orlando and Gecko copper-gold deposits, along with further exploration upside.

The two deposits combine for a resource totalling 23.5Mt at 1.7% Cu and 0.7g/t Au.

CuFe recently wrapped up an expanded scoping study for a standalone development and construction of a new processing plant at Orlando.

The study estimated production of about 43,000 tonnes of payable copper and more than 250,000 ounces of gold over a six-year mine life.

A PFS to assess the merits of a multi-user processing plant in the Tennant Creek region is now ongoing.

In Queensland, QMines is progressing a DFS for its Mt Chalmers project as it seeks to firm up the economics outlined in its 2024 PFS.

Mt Chalmers is a historical mine with a copper-dominant polymetallic resource totalling 11.86Mt at 1.22% CuEq.

The previous PFS outlined a mine life of about 10 years to produce 65,000 tonnes of copper, 160,000 ounces of gold, more than 30,000 tonnes of zinc and about 1.8Moz of silver.

QMines is targeting first production in 2028.

Advanced explorers enter the fray

Elsewhere in Queensland, True North Copper is advancing a portfolio of wholly owned copper projects in the Mt Isa region through a three-pronged growth strategy.

The company is focused on expanding the existing resource base at Mt Oxide, generating near-term cashflow at its Cloncurry copper project and progressing regional exploration.

A PFS and potential ore reserve estimate for Cloncurry are on track for late 2026.

The project holds a resource base containing more than 150,000 tonnes of copper and 171,000 ounces of gold.

Cannindah Resources is another Queensland-focused explorer looking to take its place amongst the next generation of copper developers.

This week, it grew its flagship Cannindah Breccia resource at its Mt Cannindah project by 37%.

The updated MRE stands at 23.2Mt at 0.93% CuEq, with about 85% classified in the higher confidence measured and indicated categories.

Two rigs are chasing further upside along strike to the south and at depth.

“The resource we released this week is just the start of something to come,” Switzer said.

“We have only tested about 20% of the total potential area that we’ve identified that is fertile, with respect to mineralisation.

“So if you think about 20%, 216,000 tonnes of copper equivalent metal, it’s pretty exciting.”

Switzer believes the project has reached a point where an initial economic assessment could be warranted.

But for the time being, the company remains focused on the exploration upside.

“The opportunity is there to go into things like scoping studies right now, but we would be doing something amiss,” he said.

“We still don’t understand the full upside of this, in particular the Breccia project.

“So let’s understand the upside, let’s drill the thing out and provide all stakeholders with the maximum opportunity to move this thing forward.”

Long section showing projected strike extension and planned drilling at Cannindah Breccia. Pic: Cannindah Resources

The bigger prize beneath

Drilling beyond the current resource pit shells at the Cannindah Breccia has already returned a series of significant copper hits.

Results included 493m at 1.17% CuEq from surface, 341m at 1.03% CuEq from 58m, and 1022m at 0.48% CuEq from 64m.

Assays from a further eight holes drilled outside the MRE are pending.

But the bigger prize could lie nearby, with Cannindah also chasing porphyry potential at its Southern and Eastern targets.

“We have the early indications of what we call these pencil style porphyries,” Switzer said.

“But right now our focus is clearly on the Breccia, because underneath that we know there is a fertile porphyry system somewhere.

“Let’s understand what’s at the upper level, let’s add the value – or the accretive value – for all stakeholders before we go looking for the big picture underneath.”

Cannindah Breccia and the Southern and Eastern porphyry targets at Mt Cannindah. Pic: Cannindah Resources

Switzer pointed to Evolution Mining’s (ASX:EVN) Northparkes copper-gold mine in NSW as an example of what a successful porphyry system can deliver.

“You see operations like Northparkes today with Evolution Mining, they’re only producing modest amount of metal, you know, 60 to 80 thousand ounces of equivalent gold metal,” he said.

“But it’s at negative $2000 an ounce because of all the by-product commodities.

“So these things are cash cows, absolute cash cows.

“And if you get onto them, it’s just on the road to resource heaven.”

Recent reconnaissance drilling at the Appletree prospect at Southern Target returned broad intervals of multi-element mineralisation typical of porphyry halo mineralisation.

Cannindah believes this high-priority zone could point towards a buried porphyry centre.

Assays from three diamond holes at the prospect are now pending.

At Stockhead, we tell it like it is. While Cannindah Resources, Pivotal Metals, Caravel Minerals, Hot Chili, Kantra Copper, QMines, CuFe and True North Copper are Stockhead advertisers, they did not sponsor this article.