Anti-crisis metal: Azerbaijan’s ambitious copper plans Towards a smelting hub

Recently, the London Metal Exchange (LME) recorded a new historic high for copper contract prices, nearly reaching $12,000 per tonne. According to Citigroup Inc., demand for copper is expected to remain strong, driven by the “green” energy transition, a boom in the IT sector, the construction of data centres, rising demand in the defence industry, and more.

In Azerbaijan, the sector has also achieved its own record: from January to November of this year, copper concentrate production exceeded 6,420 tonnes—33 times higher than the same period last year. Looking ahead, as the Filizchay, Garadagh copper-porphyry deposits and several other reserves in the Karabakh region are developed, the country has a real opportunity to become a copper smelting hub for the South Caucasus.

Economists have dubbed copper the “anti-crisis metal” and even the “gold of the 21st century.” As the third most consumed metal in the world after steel and aluminium, copper is expected to maintain high market demand in the coming years. Since the beginning of this year, spot copper prices have risen by 36%, and recently, three-month futures on the LME reached a historic high of $11,952 per tonne.

According to experts, copper demand surged to record levels in 2025 due to concerns about a global shortage of the metal, and analysts expect the price rally to continue into 2026.

Leading international media company CNBC, which specialises in business and financial news, notes that copper demand is surging amid the “green” energy transition, the expansion of power grids and the installation of high-voltage transmission lines, the growth of electric vehicle production, consumer electronics, and electrical equipment, and—importantly—the IT sector boom, including the development of cloud infrastructure with large data centres. All of these applications require significant amounts of copper, prized for its excellent thermal and electrical conductivity.

According to analysts at Citigroup Inc., the largest financial conglomerate in the U.S., copper prices are expected to rise to $13,000 per tonne at the beginning of 2026 and could reach $15,000 per tonne by the second quarter of next year. Experts attribute this trend to a copper market deficit, citing limited supply from mining companies and continued stockpiling of the metal in the U.S.

In particular, over the past five to seven years, copper production has experienced disruptions, primarily at ageing and depleting deposits in South America. Significant declines in global copper ore reserves at currently exploited sites are evidenced by production interruptions, including the accident at the Grasberg mine in Indonesia, as well as reduced output forecasts from major players such as Glencore. On the other hand, bringing new deposits online is constrained by their remote locations and the extremely high capital costs of development: to prevent a copper shortage, industry experts estimate that over $100 billion in investment will be required by mining companies.

Additional pressure on the market is coming from the active redirection of copper supplies to the United States: traders are seeking to take advantage of higher prices on the American Comex exchange and to avoid potential import tariffs. As a result, copper stocks on Comex have risen to 405,800 tonnes, accounting for 61% of all global exchange reserves compared with 20% at the beginning of 2025.

In this context, the copper market is expected to face a deficit of around 124,000 tonnes in 2025, with the gap between demand and supply potentially widening to 150,000 tonnes in 2026. Investment bank Macquarie forecasts global demand will rise to 27 million tonnes this year, with consumption in China growing by 3.7% and by roughly 3% outside China next year.

In short, copper, alongside oil, has long become a strategic commodity, and a country’s potential for its extraction and processing affects its competitive position. Therefore, the positive changes observed today in the global market open excellent opportunities for Azerbaijan, given the country’s substantial raw material potential and existing processing plants, as well as promising prospects for constructing facilities to produce finished products.

Over the first 11 months of this year, Azerbaijan produced 6,420.6 tonnes of copper concentrate—33 times more than the same period last year. This success is expected to expand, and production volumes could increase severalfold next year, taking into account plans to expand the country’s raw material base.

Copper production in Azerbaijan is carried out by the state-owned company AzerGold CJSC and the private company Anglo Asian Mining (AAM). Europe has traditionally been the main market for copper concentrate, while shipments to Uzbekistan began in 2019. In recent years, there has been a trend toward increased investment in developing the country’s copper deposits. Alongside the relatively older contract sites of Gadabay and Gosha, AAM is now developing three new porphyry deposits: Garadagh, the adjacent copper deposit Kharkhar, and a site in the Karabakh Economic Region—Damirli—with reserves of around 275,000 tonnes of copper and 3,200 tonnes of molybdenum.

Recently, AAM signed a contract with Singapore-based multinational trading company Trafigura Pte Ltd and began selling concentrate from the Damirli mine. By the end of 2026, production at this site is expected to reach approximately 15,000 tonnes of copper per year. Overall, according to its strategic development plan, AAM intends to make copper its main product by 2029, with projected annual production of 50,000–55,000 tonnes in copper equivalent.

AzerGold also has ambitious plans in this area. By 2028, the company intends to bring four copper ore deposits into operation. In the long term, it plans to develop the Filizchay polymetallic deposit—the second-largest in Europe by reserves—with total resources estimated at around 120 million tonnes. This site contains substantial deposits not only of copper but also of lead, zinc, and silver. According to updated data, the Filizchay deposit, located in the Balakan district, could generate over 10 billion manats ($589 million) in revenue for Azerbaijan, compared with the previously estimated 6 billion manats ($353million)

And that’s not all: according to data from the Ministry of Ecology and Natural Resources of Azerbaijan, copper deposits in the country are found not only in the Balakan-Zagatala region but also in the Gadabay, Kalbajar, Garadagh, and Ordubad ore districts. The Garadagh copper-porphyry deposit alone accounts for approximately 5% of the country's total ore reserves. The recently liberated Karabakh region is also highly promising, with two major copper deposits, and copper is present at the polymetallic Vejnali deposit.

Given the surging global demand for copper, Azerbaijan has the potential to surpass Georgia and approach Armenia’s production volumes in the near future, particularly considering the significant depletion of deposits in neighbouring countries.

In Georgia, copper concentrate production peaked in 2008 at 18,700 tonnes; since then, output has declined to 6,364 tonnes in 2022 and continues to fall. In Armenia, the main production centres are the Kajaran and Teghut deposits, and in 2024, the country produced just over 301,000 tonnes of copper-molybdenum concentrate. The country’s exports are primarily this copper-molybdenum concentrate, with pure copper accounting for roughly 25%. Moreover, due to resource depletion and financial and technological challenges, concentrate production in Armenia fell to 235,000 tonnes during January–October 2025.

Notably, both Georgia and Armenia export only the ore semi-finished product because they lack the capacity to smelt copper from concentrate and produce high value-added finished products. According to experts, building a copper smelter is economically viable only if at least 50,000–60,000 tonnes of copper concentrate are processed annually. Although Iran and China have at different times expressed interest in participating in the construction of a smelter in Armenia, portfolio investors have not yet entered the country due to a lack of transparent data on ore reserves, as well as energy and financial challenges.

In this regard, Azerbaijan has strong prospects for building a copper smelting plant once its key deposits are brought into operation and concentrate production increases severalfold. The country’s advantages include a well-developed transport network, which reduces delivery distances, and a robust power system—copper smelting is highly energy-intensive—with a total capacity of 9,732.5 MW already in place, expected to grow by another quarter by 2030 through new “green” generation projects.

Moreover, in the industrial clusters of Sumgayit, the production of copper cathode plates and power cables has long been established, and this output is actively exported. Currently, imported copper is used, but if a smelter were built domestically, it could be replaced with local copper, significantly improving production profitability.