Don’t forget the copper READ THIS
Posted: Sat Nov 25, 2023 7:19 am
Absolutely fascinating new article that debates future copper demand and supply. A critical read for all GGP-ers.
Fact stands that around 80% of all new copper supply ( from the world's 5 new massive African, Mongolian and South American copper projects) has already been locked up in off-take agreements with China , South Korea and Japan.
Very recent (past few weeks) smelter refinery pricing contracts now imply significant trader concerns over supply scarcity and very near term tightening supply.
And as an example of the big moves playing out in copper just last week: The Chinese group MMG (also plagued by labour issues in its South American mines just over-paid massively - $1.9bn - for Botswana's smallish, but newly producing underground Khomecau copper mine (producing 60kt of copper via a 5mt mill with 160mt resource @2% CU equivalent bought from a private equity group Cupric Canyon. Just Imagine how much copper Havieron will produce at 2 - 3% copper in the top 50 - 100m or so around Had 5.
These new locked in supply off take deals leave the US , Canadian and the EU's industrial complex fighting with the rest of the world over the remaining 20% of global copper supply - where the US alone uses/consumes about 1/4 of everything the world produces - from oil to consumer products.
This leaves for a pretty scary situation … It’s also telling that the Chinese are scraping the barrel globally seeking out and buying up any new copper supply.
Historically, supply wasn’t an issue because cut-off grades were simply lowered in big mines from 1.5% to 1% gradually to 0.8 and 0.5% with rising copper and metal prices to increase reserves and offset supply gaps … but that game is now very much up - they've squeezed all the juice out of these big projects - and with an historic dearth of investment in new supply and exploration, theres a really big problem emerging in the copper market.
Principally, in the big South American mines sub 0.5 % CU ore grades, high energy costs, and water supply pressure, and labour issues are now conspiring to make theses old big Chilean and Peruvian projects uneconomic - hence all the recent issues with strikes and labour problems leading to temporary shutdowns and or total closures.
https://www.investorideas.com/news/2023 ... Copper.asp
A must read …
This is why Pierre Lassonde says “if you have long life copper-gold asset - you’re in nirvana”
Fact stands that around 80% of all new copper supply ( from the world's 5 new massive African, Mongolian and South American copper projects) has already been locked up in off-take agreements with China , South Korea and Japan.
Very recent (past few weeks) smelter refinery pricing contracts now imply significant trader concerns over supply scarcity and very near term tightening supply.
And as an example of the big moves playing out in copper just last week: The Chinese group MMG (also plagued by labour issues in its South American mines just over-paid massively - $1.9bn - for Botswana's smallish, but newly producing underground Khomecau copper mine (producing 60kt of copper via a 5mt mill with 160mt resource @2% CU equivalent bought from a private equity group Cupric Canyon. Just Imagine how much copper Havieron will produce at 2 - 3% copper in the top 50 - 100m or so around Had 5.
These new locked in supply off take deals leave the US , Canadian and the EU's industrial complex fighting with the rest of the world over the remaining 20% of global copper supply - where the US alone uses/consumes about 1/4 of everything the world produces - from oil to consumer products.
This leaves for a pretty scary situation … It’s also telling that the Chinese are scraping the barrel globally seeking out and buying up any new copper supply.
Historically, supply wasn’t an issue because cut-off grades were simply lowered in big mines from 1.5% to 1% gradually to 0.8 and 0.5% with rising copper and metal prices to increase reserves and offset supply gaps … but that game is now very much up - they've squeezed all the juice out of these big projects - and with an historic dearth of investment in new supply and exploration, theres a really big problem emerging in the copper market.
Principally, in the big South American mines sub 0.5 % CU ore grades, high energy costs, and water supply pressure, and labour issues are now conspiring to make theses old big Chilean and Peruvian projects uneconomic - hence all the recent issues with strikes and labour problems leading to temporary shutdowns and or total closures.
https://www.investorideas.com/news/2023 ... Copper.asp
A must read …
This is why Pierre Lassonde says “if you have long life copper-gold asset - you’re in nirvana”