Two weeks ago I wrote about how it might be time to dig up your gold stash as the iconic Yukon metal soared past the psychologically important US$3000 per ounce mark.
This week let’s look at the Yukon’s second favourite metal: copper.
On March 31, it was named “2025’s hottest commodity” by the Wall Street Journal, before tumbling sharply last week as markets reacted to President Trump’s tariff plans.
Copper is vastly more useful than gold. It is embedded across the global economy in everything from electric motors to water pipes to electronics. Your iPhone wouldn’t work without the 6 grams of copper inside it.
As a result, the world’s appetite for copper is enormous. The U.S. Geological Survey says miners produced 23 million tonnes of copper in 2024, a figure 7000 times bigger than gold production.
While US copper prices were under US$1 per pound as recently as 2003, since then they have risen strongly as Chinese and then broader global growth drove demand. Prices surged to over US$5 per pound in May 2024 and then last month hit new records of almost US$5.25 per pound.
In their latest copper report, US Geological Survey analysts say copper prices were supported in 2024 by “multiple factors, such as expectations for reduced global copper supply in the near future, optimistic sentiment regarding world copper demand, strong manufacturing production in China, and decreasing inflation in the United States.”
Recently, U.S. copper prices were further boosted by fears of incoming U.S. tariffs. Big American users tried to stock up in advance of tariff announcements, causing U.S. prices to rise even more than global prices on the London market.
This is a highly unusual development, since global and U.S. prices traditionally have been closely aligned. It is also a meaningful trend for the Yukon. More on that in a minute.
In the aftermath of new U.S. tariffs announced on April 2, copper prices slumped by April 4 to around US$4.50 per pound. Traders worried that tariffs signalled serious headwinds for the U.S. and broader global economy. Such a slowdown would hit manufacturing and construction activity, key demand centres for copper.
Despite this sharp fall -- almost 15 per cent in just 10 days -- keep in mind that copper prices are still higher than they were back in January or for much of the past few years. Especially in Canadian dollar terms thanks to the loonie’s depreciation.
Copper miners, traders and buyers are now watching what happens next with tariffs and the economy.
So what does all this mean for the Yukon?
We have huge copper potential. For example, copper was the main output of the Minto mine. The Selkirk First Nation hopes to get it back into production. The massive Casino project also produces copper. It announced plans last August to submit its Environmental and Socio-economic Effects Statement to YESAB this July.
According to Casino’s website, the project plans to produce a whopping 4.27 billion pounds or around two million tonnes of copper over its quarter-century project life.
Think about how major Yukon copper production could fit into our fraught geo-economic situation.
It would boost the Yukon economy, making us less of a cash drain on a federal treasury that may be straining to pay for major national economic infrastructure and ramping up defence spending.
It could also help the industrial and climate-transition needs of key Canadian allies in Asia. Much of the Yukon’s copper production has traditionally gone to Japan. Despite the fact we would have to ship it via Skagway, Yukon copper miners could probably still avoid U.S. tariffs if they used bonded shipments to tranship through the Alaska panhandle.
Trade regulations might require the copper concentrate to travel through the U.S. in costlier sealed containers, accompanied by plenty of paperwork, but it could still work. Assuming the upgraded mining port facilities in Skagway get built and operate at a reasonable price.
Yukon miners would also have the option to ship their concentrate to the Lower 48. While this might seem problematic given U.S. tariffs, the recent U.S. “reciprocal” tariff announcement may have opened an opportunity.
U.S. tariffs now apply to all major copper producing countries. However, copper itself was exempted from the new tariffs pending a special review for copper that the US government plans to complete later in the year.
The review will look at U.S. needs for the strategic metal, the risks of over-reliance on China and other producers, and the options to meet U.S. requirements for reliable supplies.
In parallel, the U.S. has given an exemption from the tariffs to Canadian goods that comply with the North American content rules of the US-Mexico-Canada trade deal.
It is too early to predict what the outcome of the U.S. study will be. But one plausible scenario is tariffs on global copper producers, but with an exemption for Canadian and Mexican copper. The Yukon would, in this case, have advantageous access to a higher-priced US market compared to copper producers in Chile or China.
We would retain the option to ship to Japan if the tariff situation changed, unless the U.S. went so far as to block this option.
Seems confusing and complicated? It is. We shall see how investors feel about ploughing money into Yukon copper mines when such trade risks are piled on top of the existing risk of getting tangled in the Yukon’s complex and politicized mine permitting process.
Keith Halliday is a Yukon economist and the winner of the Canadian Community Newspaper Award for Outstanding Columnist. The audiobook version of his most recent book Moonshadows, a Yukon-noir thriller, has just been released.
