Critical Materials Replacement: Why Copper is Becoming an Innovation Problem, Not Just a Mining Problem

06/016/2026

The global transition towards electrification is reshaping demand for industrial materials. As investment accelerates across electric vehicles, renewable energy, grid infrastructure, AI data centers, and advanced manufacturing, a growing number of industries are competing for the same critical resources.

Copper sits at the center of this transition. Its exceptional electrical conductivity makes it indispensable across electrification technologies, from electric vehicles and renewable energy to grid infrastructure and data centers. At the same time, demand is rising faster than supply can respond, driving sustained price increases and exposing structural constraints including declining ore grades, lengthy mine development timelines, and growing geopolitical complexity. Copper is no longer simply a commodity; it is becoming a strategic constraint on industrial growth.

Retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PCOPPUSDM, July 8, 2026.

The challenge extends beyond today's market conditions. The International Energy Agency estimates that announced mining projects may only satisfy around 70% of projected copper demand by 2035 (1), highlighting a widening gap between future demand and supply. Increasingly, manufacturers are responding by redesigning products and manufacturing systems to reduce dependence on constrained materials while maintaining system performance.

This represents a broader shift in industrial innovation. Some of the most compelling opportunities emerge not from producing more constrained resources, but from developing the materials, manufacturing technologies, and engineering solutions that enable industries to achieve equivalent or even better performance with fewer critical resources.

Engineering the Next Generation of Electrical Systems

Moreover, engineering is increasingly shifting from optimizing individual materials to optimizing entire systems around performance outcomes. Aluminum provides a compelling example of this transition. Although it cannot match copper's electrical conductivity, its it is roughly one-third of the cost (2) , lighter weight, and greater abundance make it an increasingly attractive alternative where products can be redesigned to leverage these advantages. This approach is already well established in power transmission and is expanding into electric vehicles, battery systems, industrial power distribution, and electrical equipment.

Where we see the investment opportunity

For investors, the opportunity lies not in the material itself, but in the technologies that enable critical materials replacement to become commercially viable at scale.

This innovation spans the entire engineering stack—from conductor alloys and surface engineering that improve material performance, to joining technologies and advanced manufacturing that enable reliable system integration, through to AI-enabled simulation and digital engineering tools that optimize products around alternative material properties rather than historical assumptions.

Collectively, these technologies reduce performance, reliability, and manufacturing trade-offs that have historically limited material substitutions. As those barriers continue to fall, alternative materials become viable across a growing range of industrial applications, expanding the addressable market for the companies enabling their adoption.

Beyond copper: the emergence of critical materials replacement

Copper is only one example of a broader industrial transition.

Across batteries, semiconductors, permanent magnets, catalysts, and advanced manufacturing, industries are increasingly redesigning products around materials that improve cost competitiveness, supply resilience, and long-term scalability without compromising technical performance.

The next generation of industrial innovation will increasingly be defined by applying advances in materials science, engineering, and manufacturing to unlock greater performance from more abundant and strategically resilient material systems. As a result, critical materials replacement is evolving from a response to commodity price volatility into a strategic capability that strengthens supply chain resilience, improves manufacturing scalability, and supports the continued expansion of electrification.

A CMVC Perspective

We believe critical materials replacement is becoming a strategic capability that strengthens supply chain resilience, improves manufacturing scalability, and enables the continued expansion of electrification.

For investors, this creates opportunities that extend well beyond individual commodities. It opens the door to a new generation of companies building the technologies that will underpin electrification, industrial resilience, and advanced manufacturing for decades to come.

(1) IEA (2024), “Copper supply requirements and expected supply from announced projects in 2035,” IEA, Paris. https://www.iea.org/reports/global-critical-minerals-outlook-2025/executive-summary

(2) FRED, Federal Reserve Bank of St. Louis; International Monetary Fund, Global price of Aluminum (PALUMUSDM) and Global price of Copper (PCOPPUSDM), monthly average, USD per metric ton. Retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/graph/?g=LpDM, July 8, 2026.