* Projects approved in 2017-2018 coming on stream 2022-2023
* Many projects shelved after 2013 due to low prices
By Pratima Desai
LONDON, April 27 (Reuters) - Ample copper supplies next year
and in 2023 will keep the market balanced, but miners need to
start investing in new capacity now to meet a pick up in demand
growth as economies switch to renewable energy.
Copper prices at around $9,900 a tonne, close to the
record $10,190 a tonne hit in February 2011, are significantly
above levels needed for new projects and expansions to be
profitable.
Many projects were shelved after 2013 when prices fell below
minimum profit thresholds.
"For 2030/2031 we are looking at a supply gap of 4.5 million
tonnes of greenfield project capacity, " said William Tankard,
analyst at Wood Mackenzie.
"There is a compelling need to press on with technical
studies, mine permitting and financing efforts in order to
maintain a supply trend that can keep pace with demand growth in
the medium term."
Projects coming onstream next year and in 2023 were mostly
approved in 2017 and 2018. They include the expansion of BHP's
Spence mine in Chile, which is expected to ramp
up to full capacity next year, producing 300,000 tonnes a year
until at least 2026.
Anglo American's Quellaveco project in Peru is
expected to produce up to 300,000 tonnes a year from 2023.
"During the last price upcycle in 2016-2018, $25 billion
worth of projects were approved with annual production capacity
of 1.8 million tonnes," JPMorgan analysts said in a note.
"Supply from these projects will be entering the market over
the next three years."
Many of these projects were approved when copper prices were
around $6,500 a tonne.
They are now much higher, but miners are not committing to
investment, according to Bank Of America analyst Michael Widmer.
"To meet copper demand, miners need to spend $60 billion on
capex annually until 2025, but this year we are only getting $45
billion."
Bank of America estimates copper demand last year linked to
decarbonisation at 2.35 million tonnes or 10% of the global
total. It expects that number to rise to 4 million tonnes in
2025 and 5.2 million tonnes in 2030.
(Reporting by Pratima Desai. Editing by Mark Potter)
Anglo American (AAL)
