RE: Another article on copper supply deficiency18 Jan 2022 14:10
Over 200 copper mines are expected to run out of ore before 2035, with not enough new mines in the pipeline to take their place, CRU estimates.
Some of the largest copper mines are seeing their reserves dwindle; they are having to dramatically slow production due to major capital-intensive projects to move operations from open pit to underground.
Examples include the world's two largest copper mines, Escondida in Chile and Grasberg in Indonesia, along with Chuquicamata, the biggest open-pit mine on Earth.
These cuts are significant to the global copper market because Chile is the world's biggest copper-producing nation — supplying 30% of the world's red metal. Adding insult to injury, copper grades have declined about 25% in Chile over the last decade, bringing less ore to market.
A report last year by Goehring & Rozencwajg Associates found that both greenfield and brownfield reserve additions are expected to disappoint through the decade.
According to the New York-based research firm, the number of new world-class discoveries coming online this decade "will decline substantially and depletion problems at existing mines will accelerate."
Additionally, geological constraints surrounding copper porphyry deposits, a subject few industry analysts let alone investors understand, will contribute to the problems, the report said.
Goehring & Rozencwajg also pointed out that miners have been "artificially" boosting reserves by lowering their cut-off grades when copper prices rise in order to make more profit. But this practice only works to a certain point, when cut-off grades cannot be reduced any further.
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