Amazon’s Expansion into Copper for AI Infrastructure
In a segment of “The Craman Countdown,” Pacer ETF President Sean O’Hara discusses the rising importance of copper and other essential metals for powering AI technologies, data centers, and advanced electronics.
Amazon is broadening its efforts to establish large-scale artificial intelligence data centers in Arizona. This move coincides with the reopening of a copper mine, which is becoming increasingly crucial for the tech giant’s AI framework.
According to a recent report from a notable financial publication, Amazon Web Services (AWS) has entered into a two-year agreement with Rio Tinto’s Newton operation to procure copper necessary for its expanding AI data facilities.
The Johnson Camp mine near Tucson, which employs Rio Tinto’s innovative bioleaching technology, recommenced operations last year. It’s noteworthy as one of the first new copper production sources in the U.S. in over a decade. This contract covers about 14,000 tonnes of copper cathodes spread over four years.
“We are working at the product level to discover low-carbon solutions that fuel business growth,” stated Chris Roe, Amazon’s worldwide carbon director. “This includes steel, concrete, and importantly, copper for data centers.”
The Copper Development Association highlights that a typical data center consumes between 5,000 and 15,000 tons of copper. However, larger facilities might need even more for wiring, transformers, circuit boards, and power systems.
This supply, while significant, represents only a portion of the copper needed for a major data center, underscoring the burgeoning demand for copper in supporting AI infrastructure.
Amazon aims to incorporate low-carbon materials throughout its supply chain. The copper is intended for manufacturers producing components for AWS data centers, while AWS plans to provide cloud computing and data analytics to assist Rio Tinto in optimizing copper production and recovery.
“We’re not only processing ore that would otherwise be unprofitable but are also achieving it in a way that is more sustainable in terms of carbon and water usage,” said Katie Jackson, Rio’s copper business CEO. “It’s excellent to partner with clients who consider these factors valuable.”
Last year saw copper prices nearing record highs, with benchmark prices surpassing $6 per pound amid increasing global supply concerns spurred by escalating demand.
