Amazon is buying America’s first new copper output in more than a decade
The copper, which is being produced in Arizona by Rio Tinto with bacteria and acid, will be used for data-center construction.
Amazon.com is turning to an Arizona mine that last year became the first new source of U.S. copper in more than a decade, to meet its data centers’ ravenous appetite for the industrial metal.
The mine was restarted as a proving ground for Rio Tinto’s new method of unlocking low-grade copper deposits. Rio signed a two-year supply pact with Amazon Web Services, a vote of confidence for its Nuton venture, which uses bacteria and acid to extract copper from ore that was previously uneconomical to process.
The move by Amazon is the latest example of a technology company rushing to secure the power and critical materials necessary to build and operate artificial-intelligence data centers.
The Nuton copper will satisfy only a sliver of Amazon’s needs.
The biggest data centers each require tens of thousands of metric tons of copper for all the wires, busbars, circuit boards, transformers and other electrical components housed there.
The 14,000 metric tons of copper cathode that Rio expects the Arizona Nuton project to yield over four years wouldn’t be enough for one of those facilities.
Rio deployed its bioleaching process in the recent restart of a mine east of Tucson and has partnerships to take the technology to several others in the Americas. The idea is to uncork the low-grade ore left behind at old mines and is key to Rio’s plans to boost output when new discoveries are harder than ever to bring online and copper demand is surging.
Growing copper consumption for data-center construction, along with power-grid upgrades, electric vehicles and renewable-energy installations, has more than made up for slower demand from cyclical manufacturing sectors and in construction, where the metal is used for plumbing and wiring.
Copper prices have hit record highs this month in London and New York, where futures gained 41% last year and in recent days have traded above $6 a pound for the first time.
U.S. prices are potentially poised to climb even higher. The White House says it is weighing tariffs beyond the 50% import tax President Trump in the summer slapped on copper products such as wire and pipe.
Mining executives, analysts and economic forecasters warn that a copper shortage risks derailing the AI boom, which has fueled stock-market gains and become the main driver of U.S. economic growth.
It takes more than two decades, on average, to bring a new mine from discovery to production. Although rising prices are likely to boost copper recycling and encourage engineers to cut the amount of the metal needed for various applications, a huge supply deficit is on the horizon.
A study published last week by S&P Global estimates that AI will help lift copper demand 50% from current levels by 2040, while mining output dwindles, resulting in a 25% shortfall.
“This emerging gap represents systemic risk for global industries, technological advancement, and economic growth," the study’s authors wrote.
Rio executives were frustrated by the length of time it took to permit new mines when they decided to attempt to commercialize the Nuton technology that the company’s scientists had been honing for decades in the lab.
The Anglo-Australian miner found a shovel-ready location in southeastern Arizona, where a skeleton crew had kept Gunnison Copper’s Johnson Camp mine in compliance with its permits after the previous owners halted excavation of the open pit in 2010.
The low-grade layer—which the previous owners hit and deemed unworthy of mining—was the type of primary sulfide ore Rio seeks to unlock with Nuton.
The company estimates that 70% of global copper reserves are contained in such ores, frequently in concentrations that aren’t worth the expense of grinding into powders and hauling—often overseas—for smelting and refining.
At Johnson Camp, ore is coated with bacteria and acid and heaped into a pile, where the copper drips out and into a facility where the metal is plated onto ready-to-use cathodes. The first batch of Nuton cathodes was produced in December.
“It’s not just the fact that we’re processing ores that otherwise would not have been economic to process, but also that we do it at lower carbon and lower water intensity," said Katie Jackson, chief executive of Rio’s copper business. “It’s great to see that there are customers who see that as part of the value proposition."
Although Trump has been rolling back his predecessor’s efforts to boost renewable-energy production and reduce greenhouse gases, big companies, including Amazon, have continued to pursue cleaner power and cut their carbon emissions.
“We work at the commodity level to find lower carbon solutions to drive our business growth," said Chris Roe, Amazon’s director of worldwide carbon. “That means steel, and that means concrete, and it absolutely means copper with regard to our data centers."
Roe said the copper will be routed to companies that produce components for Amazon’s data centers.
As part of the deal, Amazon is supplying Rio with cloud-computing and data analytics to optimize Nuton’s recovery rates and help the miner expand production.
Write to Ryan Dezember at ryan.dezember@wsj.com
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