The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Karen Kwok

LONDON, Jan 16 (Reuters Breakingviews) - Mining bosses like BHP's BHP.AX Mike Henry should, in theory, be digging right now. Copper prices have surged 50% over the past year, topping $13,000 per metric ton on the London Metal Exchange on Thursday — well above the $11,000 mark that typically justifies constructing new mines. The catch? Soaring prices rarely stick.

Much of copper’s recent record rally reflects temporary factors. Traders are stockpiling ahead of potential U.S. tariffs due in June, while top producers such as Rio Tinto RIO.AX and Freeport-McMoRan FCX.N have cut their production forecasts because of idiosyncratic problems at key sites. The resulting squeeze has proved enough to drive short-term prices higher, but it may not last. Richer margins encourage more collection and processing of recycled copper, boosting supply over time. Tariff fears also cut both ways: if U.S. President Donald Trump backs off, prices could tumble fast.

Questionable demand is another reason to think prices may fall. China still consumes roughly half of global copper, but the mix of uses is changing. Clean energy and electric vehicles are gaining share: Wood Mackenzie and Bernstein analysis see them making up 12% and 9% of global demand, respectively, by 2030, while traditional sources of demand like construction lose steam. The problem is that the newer Chinese sectors remain exposed to policy shifts, implying a slowdown if Beijing shifts its priorities or successfully ends the clean-car sector's chronic overcapacity. Globally, a much-heralded data centre boom may only help a little: the sector will account for just 1% of copper demand by 2030, according to Wood Mackenzie.

That uncertainty helps explain why miners like Anglo American AAL.L and Teck Resources TECKb.TO, or Glencore GLEN.L and Rio Tinto, are chasing M&A instead of breaking ground on new copper sites. The world needs a new supply, but the economics are tight. To make developing a mine economically sustainable, copper prices would have to stay at $11,000, according to consultant Wood Mackenzie. Price forecasts by Morgan Stanley suggest that between now and 2030 it will average around $10,700.

This would leave no room for miners to make a profit on new sites. And the real breakeven number may be higher after factoring in other challenges like securing water and labour, as well as possible permitting delays that can stretch over a decade, according to Morgan Stanley strategist Amy Gower.

Meanwhile, Wood Mackenzie estimates that meeting forecast 2035 demand will require over $210 billion in investment. Yet total capital investment in copper mining from 2019 to 2025 amounted to only around $76 billion. About half of that came from Chinese miners, followed by Russians.

There's a geographic shift happening, too. The next wave of supply is moving beyond Latin America and Central Africa into regions like Central Asia, where countries such as Kazakhstan are closer to Beijing. For global miners, record prices are welcome. But in copper, that's not always enough to justify putting a shovel in the ground.

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Three-month forward copper prices on the London Metal Exchange reached a record $13,310 per metric ton on January 15.

(Editing by Liam Proud; Production by Streisand Neto)

((For previous columns by the author, Reuters customers can click on KWOK/karen.kwok@thomsonreuters.com))