Artificial intelligence is rapidly reshaping the landscape of economies around the world. Estimates indicate that generative AI alone will triple its growth to a total market value of $1.3 trillion in the next decade.
As most investors know by now, there is a surge in the demand for energy-guzzling data centers that are designed to develop and train AI systems. They also know that advanced semiconductor chips are at the heart of all AI technologies. However, many haven’t considered that critical minerals, such as copper, gold and silver, are vital components of this burgeoning industry.
To put the skyrocketing demand for AI data centers into perspective, consider the conclusion in the mid-year 2024 United States Data Report published by Jones Lang Laselle indicating that the creation of new data centers within the U.S. alone will grow at a CAGR of 23% until 2030. The International Energy Agency (“IEA”) notes that globally, AI data centers consumed approximately 460 TWh (terawatt hours) of electricity in 2022, but that figure is projected to jump to 1,000 terawatt hours in 2026. As the IEA points out, this is the amount of energy Japan consumes! That huge amount of energy underscores how quickly AI infrastructure is growing, and that means there is a surge in the demand for critical metals making it possible for all those data centers to be constructed and utilized.
Copper is essential in driving the development of AI technology and the establishment of data centers. With its excellent electrical conductivity, copper is used for interconnects within the integrated circuitry of advanced AI chips; not to mention busbars and heat exchangers used in data centers. And, of course, copper helps to get power to and within AI data centers. The IEA projects that the yearly demand for copper, specifically for use within energy grids, will double by 2040 and within the coming decade there will be a copper deficit of approximately ten million metric tons.
While we’ve been mostly looking at copper in this article, similar scenarios are evident for other critical minerals like gold and silver as the AI industry continues its meteoritic growth.
McEwen Mining (NYSE: MUX) (TSX: MUX) is well poised to benefit from the tailwinds arising from the explosive growth of the AI industry. For example, the company has a large exposure to copper through its subsidiary, McEwen Copper, owner of the Los Azules copper deposit in Argentina, which is one of the world’s largest and most economically robust undeveloped copper projects.
Given the skyrocketing demand for copper and the anticipated supply shortages in the coming decades, McEwen’s copper resource alone could be a game-changer. The ongoing geopolitical tensions and the drive to develop critical metals’ supply lines outside of those controlled by China and its allies makes the gold and silver extraction operations of McEwen Mining in the Americas better positioned to tap the AI revolution for years and decades to come.
For more information, visit the company’s website at www.McEwenMining.com
NOTE TO INVESTORS: The latest news and updates relating to MUX are available in the company’s newsroom at https://nnw.fm/MUX
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