The times8 Jun 2021 19:29
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Kamoa-Kakula in the Democratic Republic of Congo is a rare commodity in the modern resources industry: a high-grade copper mine that one day could produce enough metal to satisfy more than 5 per cent of China’s annual demand.
Surrounded by small villages, the mine employs around 7,000 workers and has its own road for trucks to carry rock to a nearby smelter. The company is also upgrading a 40-year-old hydropower station on the Congo River to provide electricity to run the mine.
The first phase of the $2bn project began operating in May, more than four years after the last big copper mine of similar scale, MMG’s Las Bambas, in Peru, came online. Despite these examples, years of belt tightening mean the pipeline of new copper projects is running dangerously thin just as demand for the metal — used in everything from wind turbines to electric vehicles — is set to soar.
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https://www.ft.com/content/40907aa6-354e-42f8-8d51-8cc01f0e9687
Governments around the world are launching huge stimulus programmes focused on job creation and environmental stability.
The coming together of such demand and potential supply shortages has many people on Wall Street, and in the City of London, hailing the arrival of a commodities supercycle and asking if copper is set to become the new oil, a strategically important raw material.
“We see potential for a multi-decade commodity cycle ahead driven by decarbonisation of the global economy and shift to cleaner energy,” says Tal Lomnitzer, a senior fund manager at Janus Henderson. “It has more legs to it than the China boom of the early 2000s.”
Commodities have enjoyed a dizzying run over the past year, initially on the back of strong demand from China, and more recently other big economies. Supply disruptions have provided further impetus. Copper, iron ore, the key ingredient needed to make steel, palladium and timber all hit record highs in May, while agricultural commodities including grains, oilseeds, sugar and dairy have also jumped.