Copper is the prize in mining megadeals

Subscribe to enjoy similar stories. Booming demand for copper is driving a spate of mining megadeals, in a rush to secure more of a metal essential to powering artificial intelligence. Rio Tinto and Glencore said late Thursday that they are in talks to create what would be the world’s largest mining company, with a market value of more than $200 billion.

Spurring those talks—and a string of other recent actual and attempted mergers—is copper. U.S. copper prices hit a record Monday on concerns that demand for the so-called red metal will outstrip supply, as well as lingering anxiety about tariffs.

Copper has uses including piping, circuit boards and wiring. Its application as a conductor of electricity is what makes the metal key to powering the AI revolution. Growing adoption of electric vehicles and renewable energy such as solar power has also boosted demand, as has increased defense spending on copper-heavy ammunition and other weaponry.

Looking ahead, new supplies aren’t expected to keep pace with the soaring demand. Demand is set to outstrip supply by 25%, or 10 million metric tons, by 2040, according to forecasts from S&P Global, unless miners increase production. “At stake is whether copper remains an enabler of progress or becomes a bottleneck to growth and innovation," Daniel Yergin, S&P Global’s vice chairman, said in a report this week.

In November, the U.S. Geological Survey added copper to its list of critical minerals deemed vital to national security and the economy, a designation that could open the door for federal aid to encourage production. U.S.