Governments attempting to move toward electrification are learning that copper is a major component of that effort.
Copper consumption by green energy sectors globally is expected to jump fivefold in the 10 years to 2030, data from consultancy CRU Group shows.
The cyclical nature of commodity markets resulted in underinvestment. Previous low copper prices led to reduced exploration budgets and fewer discoveries.
Copper producers view redistributing existing assets through M&A as faster, less costly and less risky than exploring and developing new properties. Consolidating creates bigger companies with better economies of scale and operational efficiency, with lower costs. Integrated supply chains and improved processes give producers more influence during price and regulation negotiations.
Focusing on M&A instead of discoveries has slowed response to price signals and has led to prolonged market tightness, which makes for a bullish outlook.
When China began industrializing and urbanizing hundreds of millions of people it caused a commodities supercycle. The current copper supercycle is global, sees greater demand, and is tangled with several countries’ national security.
Higher US tariffs and materials import bans are meant to assist stateside industries while tackling security concerns about Chinese control over minerals.
China will run parallel or duplicate supply chains from the same limited global supply, while producers look for other means of increasing copper output.
Analysts identified 239 copper deposits discovered between 1990 and 2023, containing 1.315 billion tonnes of copper in reserves, resources and past production. Of those, five have at least 500,000 tonnes of contained copper.
Any ore below that grade remains in the ground. When prices rise, the producer earns more per tonne and can lower the cut-off grade while still profiting.
The industry head grade was already 30 percent lower by 2015 than in 2001, while the capital cost per tonne had risen fourfold.
A Wood Mackenzie Metals and Mining division report states that delivering the base metals to meet Net-Zero 2050 “strains project delivery beyond the breaking point” from people and plant to financing and permitting. Copper “sits at the nexus of the energy transition.”
Achieving half that goal, 10 million tonnes per year by 2040, requires one new Collahuasi mine per year for the next 20 years. Yet none of the new copper mines entering production can exceed 200,000 tonnes per annum.
Located about 25 kilometres southwest of the regional center of Halls Creek on the Great Northern Highway in Northeastern Western Australia, the Koongie Park copper-zinc project lies in the Halls Creek Mobile Belt, which also has the Savannah (Sally Malay) and Copernicus nickel projects, the former Argyle diamond mine, and the Pantoro gold mining operation at Nicolsons.
Significant exploration drilling and analysis has been done there since the 1970s, usually increasing with commodity prices. Most drilling has been at the Sandiego and Onedin deposits. Through exploration and development, AuKing aims to become a mid-tier copper producer.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
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