Here's the strange thing about the looming copper shortage everyone keeps warning about: it might not actually be a copper shortage at all.

The mining industry has spent years sounding alarms about dwindling discoveries and the urgent need to bring dozens of new mines online. But new research from Benchmark Mineral Intelligence suggests that in the United States, at least, the problem isn't what's buried underground. It's what happens after you dig it up.

Raw Materials Aren't the Issue

According to Benchmark's analysis, the U.S. can cover 146% of its domestic copper demand using a combination of domestic mine output, recycled scrap, and overseas supply. That's a comfortable cushion. Compare that to China, the world's biggest copper consumer, which can only satisfy 40% of its needs domestically and depends heavily on imports of raw materials.

"The U.S. is producing more copper than it uses, and is far more self-reliant than China in terms of raw materials," Benchmark analyst Albert Mackenzie told the Financial Times. The problem, he explained, is "downstream"—the country simply doesn't have enough capacity to smelt and refine raw copper into cathode, the refined form that manufacturers need.

This is a weird bottleneck to have. You've got the stuff. You just can't process it efficiently. Mackenzie's point is that even without controlling overseas mining operations, the U.S. would still have plenty of raw copper thanks to domestic production and scrap. But if you can't turn that raw material into usable metal, you're stuck sending it elsewhere for processing—which defeats the whole point of supply security.

His argument challenges the conventional policy wisdom, which has emphasized securing upstream mining assets and building strategic stockpiles. If your processing capacity is the real constraint, stockpiling raw copper or buying mines abroad doesn't solve much.

Meanwhile, Prices Keep Climbing

Copper prices have been on a tear. London benchmark prices have climbed roughly 40% since October, hitting a record $14,000 earlier this year. The rally reflects both supply disruptions and expectations of massive future demand driven by electrification, data center buildouts, and clean energy infrastructure.

For big diversified miners, copper is increasingly becoming the star of the show—especially as iron ore markets cool off. Rio Tinto Plc (RIO) just reported flat underlying earnings of $10.87 billion for 2025, missing the $11.03 billion consensus as weaker iron ore prices dragged down results. But stronger copper prices, which averaged 17% higher during the year, helped cushion the blow alongside higher production volumes.

With the proposed merger with Glencore Plc (GLNCY) now off the table, Rio will need to find other ways to increase its copper exposure. That's easier said than done when the metal is this hot.

Price Watch: The Global X Copper Miners ETF (COPX) is up 20.71% year-to-date, reflecting investor enthusiasm for copper's long-term outlook.