Copper prices
have reached all-time highs in 2021, and the red metal’s positive price action is fueling
black market demand for
copper scrap
.
Copper theft has long been a major source of anxiety, particularly for the construction, utilities and transportation industries, and legislators are still attempting to stop property vandalism.
While stealing copper might sound difficult, it’s quite common and can affect major entities. In fact, copper thieves made off with
US$500,000 in copper wiring
from a stretch of the Manhattan subway line in New York in late 2020.
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In early 2021, Florida police arrested five men
stealing underground copper wiring
belonging to media and telecommunications giant AT&T (NYSE:
T
). The copper wire had a value of US$30,000, but the damages incurred from the vandalism were estimated at US$100,000.
With electric vehicles (EVs) requiring upwards of
80 percent more copper
than gasoline-powered vehicles, EV manufacturers are also a lucrative target for copper theft.
In mid-2021,
BNN Bloomberg reported
that tens of millions of dollars in copper have been stolen from Tesla’s (NASDAQ:
TSLA
) gigafactory in Nevada.
Each US state has its own metal recycling regulations and anti-copper theft laws, with varying degrees of stringency. The rise in copper theft lately has led to new legislation. For example,
Oklahoma state legislature
recently passed a bill aimed at strengthening existing laws designed to curtail metal thefts.
“Scrap metal theft is a huge problem in our state, particularly copper wire theft,” said Oklahoma Senator Chuck Hall. “This is a comprehensive approach to make sure all the relevant laws are in one place in the statutes and that any duplicate language is eliminated, making it easier for scrap metal dealers and other buyers to see exactly what is required to comply. It tightens the requirements for seller identification and adds remote storage batteries to the list of regulated materials.”
Copper theft is not isolated to the US, but rather is a global problem. In Canada, the provincial government of Saskatchewan also
recently passed legislation
targeting scrap metal thefts.
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“Police services, farmers, and businesses in Saskatchewan have told us about the dangerous growth of metal theft,” said Justice Minister Gordon Wyant. “This legislation will serve as a valuable tool for police when working to reduce this type of crime, which is often specifically targeted at rural property owners.”
SaskPower, the principal electric utility in the province,
fired three of its employees
in December 2020 for stealing scrap copper from the company. The utility has also reported electrical substations as targets of copper theft in recent years.
In Brazil, transit authorities have
reported millions of dollars
in vandalism and theft from traffic lights in the past few years, while power distributor Cemig has said theft of copper cables is on the rise, resulting in supply interruptions for
energy
, traffic disruptions and issues for telecommunications networks.
Reuters reported recently
that copper thefts attributed to organized crime have hobbled South Africa’s commuter rail system — the longest railway system on the continent. “We’ve never seen the rail system in this state. It’s diabolical,” said Steve Harris, secretary general of the United National Transport Union.
The government of South Africa isn’t taking copper theft lightly. In May 2021, under amended legislation, five copper thieves were handed a cumulative
1,250 year sentence
for stealing copper cables.
Whether or not tougher laws will have an impact on copper theft remains to be seen. For now, as long as copper is trading at a high price, the red metal remains alluring to those in the black market even as lawmakers worldwide try to crack down on the trade.
This is an updated version of an article first published by the Investing News Network in 2012.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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