In recent years, there has been a growing trend towards green energy, with many countries seeking to reduce their reliance on fossil fuels and transition towards cleaner, more sustainable sources of power. Colombia is no exception, with President Gustavo Petro committing to a Just Energy Transition roadmap that aims to decarbonize the economy and make Colombia an exporter of clean energy.
One of the key minerals required for the production of green energy is copper. As the keystone metal, copper is used in electric vehicles, solar panels, and wind, hydro, and geothermal units. Compared to fossil fuel and nuclear sources of energy, copper is used five times as much in renewable energy systems.
Fortunately, Colombia is well-equipped to play a vital role in the global supply chain for copper. The country is located on the Pacific belt line, a strategic strip with copper potential, and has three porphyry copper belts with important prospects. In fact, Colombia's copper deposits are world-class, with an average grade of 0.98 percent per ton, compared to the usual average grade of 0.6 percent per ton.
Moreover, Colombia has been growing its copper output, with copper mine production increasing by 800% since the start of the last decade. In December, it was announced that the Alacran project, one of the largest copper mines in Colombia, would be jointly developed by Ivanhoe Electric subsidiary Cordoba Minerals and China-based JCHX Mining. The Colombian Government declared the project a "Project of National Interest", denoting a significantly high priority for the country.
In addition to copper, silver is also a vital ingredient in the green revolution supply chain. Photovoltaic power, the leading source of green electricity, requires silver, and Colombia is well-equipped to provide this vital metal. With solar panel demand expected to grow at nearly 30% per year, the energy crisis in Europe could have a major impact on an already tight supply chain, exacerbating already low silver inventory levels and further amplifying Colombia's potential as an important future source of supply.
Colombia's government is embracing mining as a key pillar of the country's economic platform. The country has a lot to gain from mining, with the forecasted export value for the sector in 2022 estimated at $12.6 billion, up from $9.9 billion in 2021. With its abundant mineral endowment and commitment to green energy, Colombia is well-positioned to become a global powerbroker in the transition metals market.
