Presentation to the Philippines Mining Conference, Manila, September 2012
The presentation looks at the near, medium and long term outlook for copper.
In summary:
- I have identified 560 deposits containing 880 Mt Cu potentially available for development. The top tem deposits contain 200 Mt Cu.
- Historically, only 60% of copper discoveries eventually get developed as mines.
- The average grade of ore mined has dropped from 0.81% Cu in 2002 to 0.65% In 2011.
- The next generation of mines will have even lower head grades. In detail, an analysis of 145 undeveloped open pit copper projects found that they have a weighted average grade of only 0.45% Cu.
- In the short term (i.e. next 2 years), the current uncertainty around the banking and sovereign debt crises in Europe are a significant constraint to economic growth everwhere.
- Copper prices are set to decline from their levels in 2012.
- Despite a near-term wave of new supply coming in from 2013, new deficits are likely to occur in the medium to long term. This is caused by lengthy development times and numerous disruptive factors to mining.
- In the longer term (i.e 10+ years), several new copper projects will be required. Under current projections, a supply gap will start to open-up post 2020.
Note: I did the presentation as a representative of the consulting firm CRU Strategies. I regularly assist them on specific assignments in downstream aspects of the mining industry.