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Copper deficit will exceed 4 million tpy by 2026 – Mr Red Conger-2018 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition
5/11/2018 有色金属展-Copper exhibition -non-ferrous metals expo |
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Fast Markets reported that the copper market is moving into a deficit that is forecast to widen to more than 4 million tonnes per year by 2026, According to Freeport-McMoRan executive Red Conger president and chief operating officer for the US copper producer, the deficit is expected to reach 4.2 million tonne per year despite positive changes in efficiencies through technology and other methods, which will help to produce more copper over time than had been expected.
Mr Conger told the American Copper Council’s Copper College meeting – which runs May 7-10 in Denver, in the US state of Colorado that the average copper grade for global mining operations last year was 0.85-0.9%. Mr Conger said that “This means you have to process more and more material just to make the same amount of copper.” He added that “With rising copper demand, miners have to work their hardest just to stay in place, let alone produce anything additional, which requires much more effort.”
He said that new discoveries are rare, Conger added, and those that are producing today date from the late 1800s. There are very few significant copper mine projects in the pipeline, and community and permitting issues can often create delays and further uncertainty.
Mr Conger told the audience that “Right now you hear about being cautious. Balance sheets are repaired, and there aren’t a lot of people rushing in to invest right now.” In addition, development times can run for years, from exploration through design to permitting and construction.
Mr Conger said that “It took us ten years just to permit Safford.” referring to Freeport’s open-pit copper mine in the US state of Arizona.
It is also difficult to know where copper prices will be by the time new mines come onstream; according to Conger, forecasting future prices is not a focus for Freeport.
Mr Conger said that “One other aspect of when miners respond to increases in demand is that supply comes in big pieces.”
Mr Conger added that “Mine production is chunky; not like producing cars. When you permit a mine operation, it’s a huge capital investment, it takes a long period of time and it’s generally a great big chunk of production comes out of that facility that miners decide to build.”
Mr Conger explained that “If there are several coming on at the same time which often happens when prices go up and people are incentivized to go out and make investments – they all make them at roughly the same time. supply comes on at roughly the same time – you see chunks of supply coming on.”
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