A massive copper shortage is on the horizon

There is a problematic scarcity looming for one of the world's key elements , as recent reports indicate that copper is facing a pending shortage. While this may not sound consequential to the average person, experts have expressed significant concerns. Copper is widely "seen as a leading indicator of economic health" because "it is used practically everywhere — in homes and in factories, in electronics and in power generation," said Reuters .

But while the element may be a key part of economic lifelines, by 2030 global copper mines will only meet 80% of the world's copper requirements, according to the International Energy Agency . Copper did recently reach its highest-ever stock price, ballooning above $11,000 on the London Stock Exchange, but this was strictly due to investors piling on "in anticipation of deepening supply shortages," Bloomberg reported. Why is there going to be a shortage of copper, and what will it mean for the global economy?

Why is there a looming copper shortage?

Part of the reason is a misconception that copper is easy to mine, but experts say this is not correct. The resources to create copper "are not abundant, these things aren't all over the place, you have to go find them," Chris LaFemina, a global metals and mining analyst at the investment bank Jefferies, said to CNBC .

But beyond the difficulty of obtaining it, the shortage itself is likely to occur because "demand for copper is surging," said CNBC TV . This is partially due to copper being an abundantly needed material in new energy sources. CNBC pointed to offshore wind turbines , which require "about three times as much copper as does coal-fired powered generation in terms of tons per gigawatt of capacity." But mining companies are finding it hard to produce the amount of copper that will be needed for these energies.

There is a "growing consensus that [copper] demand fueled by the energy transition is going to outstrip supply, and that's why analysts are now saying we're simply not going to have enough of it," said CNBC market reporter Pippa Stevens. Insiders seemed to agree with this assessment. There will be a "real problem" with the energy transition over the next 10 years because it is "very, very hard for [copper] companies to even maintain the level of production that they have at the moment," Tyler Broda, a former metals and mining analyst at RBC Capital Markets, said to CNBC.

What will be the effects of a copper shortage?

For one, the hopes of the 10-year transition to electric vehicles are "an 'irrational' pipe dream because we don't have enough battery materials," said Fortune . The outlet also noted that even if more copper was to be found, opening a new mine takes an average of 23 years.

EVs, like wind turbines, require a tremendous amount of copper: The average EV typically "requires over 132 pounds of copper, as opposed to just 52 pounds for the average gas-powered car," said Fortune. So with an increased demand and looming shortage, it appears likely that finding enough copper to manufacture these EVs will be increasingly tough. And beyond being difficult, mining copper is "also expensive — meaning that it's tough for new entrants or smaller-capitalized companies to rush into the market."

So between EVs, wind turbines and other copper-powered technologies, "retooling power and transportation systems to run on renewable energy will require far more copper than the companies that produce it are currently committed to deliver," Bloomberg said. The question also remains as to "whether a traditionally cautious mining industry — grappling with increasingly rigorous regulations — will embrace the scale of investment needed to rewire the world."

This is not to say that there are no other solutions but using "cheaper alternatives like aluminum means compromising on efficiency," said Bloomberg. And in order for to achieve net-zero carbon emissions by 2050 — a goal the United Nations, the White House and the Paris Climate Agreement have called for — it would mean that the annual copper demand would need to nearly double by 2035, according to an S&P Global study . Whether that is doable or not remains to be seen, but for now the copper industry remains a "classic bellwether of the global economy — rising and falling in tandem with industrial production," said Bloomberg.