The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Same as EVRAZ effectively?
Thanks for the info.... Does this mean that if we are a long term holder and we are with HL we don't need to do anything?
I have no idea how that works. But if the general consencus is that we are unhappy with the management of our company then we should. Maybe we should call a shareholders meeting and express our feelings to the management and failing that on a process on how to get another captain to steer our boat. I am just saying there is no point in complaining ;we either do something or not....
I have no idea how that works. But if the general consencus is that we are unhappy with the management of our company then we should. Maybe we should call a shareholders meeting and express our feelings to the management and failing that on a process on how to get another captain to steer our boat. I am just saying there is no point in complaining ;we either do something or not....
I totally agree FIRA ..... you would have to be stupid to buy anymore shares in this company. The way it is being managed by its directors is simply a source of annual income for them that lets them maintain a certain lifestyle without producing any results.
The pnly way to turn this around is to kick them all out and go under new management. These people have no desire for the company to succed or actual growth, their only aim is to withdrawl a wage from it and do as little as possible. Is almost worth next to nothing and they will continue until there is nothing.
Is a pitty as a few years back there was hope but clearly the prrof is in the pudding.
You might as well put a light to it and torch your money ... it will only end up in the directors pockets to finance their lifestyles.
In past letters we focused heavily on the various sources of copper demand and how
strong they would be: how Chinese demand growth would continue to exceed expectations; how India would emerge as an important new source of consumption; and how
the desire to build out the renewable energy grid would introduce a whole new source
of demand. This last point is especially important: while copper is now often referred to
as a “green metal,” few analysts understood the connection between copper and renewable energy when we first wrote about it in 2016.
In this essay, we are shifting our focus from copper demand to supply. Our models strongly
suggest copper mine supply growth will grind to a halt this decade. The number of new
world-class discoveries coming online will decline substantially and depletion problems
at existing mines will accelerate. Also, geological constraints surrounding copper porphyry
deposits, a subject few analysts and investors understand, will contribute to the problems.
Stagnating copper mine supply, already colliding with strong demand, will push copper
prices far higher than anyone expects.
Significant shifts began affecting global copper supply trends more than 15 years ago.
The copper industry in 2005 began to quietly suffer from depletion problems. What
depletion is and how it is measured is an extremely complex subject. Academics, engineers,
and investors vigorously debate what exactly constitutes depletion and how it should be
measured. In broad terms, mining causes two types of mineral depletion: a decrease in
the quantity of the initial mineral reserve and a decline in the quality of the remaining
mineral reserves. Here, we focus on the declining quality of copper ore reserves, what
that does to the “head grade” (that is, the quality of the ore being mined), and its impact
on future copper mine supply. As you will see, both ore reserves and quality of ore being
mined are in pronounced declines.
Prior to 2005, few investors paid any attention to these related issues of depletion. The
reason was simple: the average reserve grade and head grade of the copper industry had
been trending upwards since the early 1980s. An extremely large number of new high-grade
copper mines commenced production, starting in the late 1980s. State control of the
Chilean copper industry was relaxed in the mid-1970s, leading to an explosion in exploration spending. Solvent-extraction electro-winnowing (SX/EW) allowed for the
processing of oxide copper deposits (previously not possible) in the early 1980s. And
there was the discovery and development of the massive, high-grade Grasberg coppergold project in Indonesia. By the late 1980s, the world was about to be flooded with new
copper supply — all of it mined from new high-grade deposits.
However, by the late 1990s new trends were beginning to take hold. The introduction
of new large-scale copper mines slowed dramatically while depleti
“I have switched from being a structural copper bear to a structural copper bull.”
Leigh Goehring, Barron’s Commodity column May 2001.
Copper has emerged as a leader in this commodity bull market. We are strong believers
that copper prices are heading significantly higher. After bottoming at $1.95 per pound
in early 2016, copper prices have more than doubled. Copper equities (as measured by
the COPX ETF) have done even better, rallying over 200% — more than twice the
increase of the S&P 500.
The previous copper bull market took place between 2001 and 2011 and saw prices rise
seven-fold: from $0.60 to $4.62 per pound. As shown in the Barron’s quote above, we
wholeheartedly embraced that copper bull market and maintained sizable exposure
throughout the rally. The fundamentals today are even more bullish. We would not be
surprised to see copper prices again advance a minimum of seven-fold before this bull
market is over. Using $1.95 as our starting point, we expect copper prices to potentially
peak near $15 per pound by the latter part of this decade.
A snapshot from from Goehring & Rozencwajg
Non-OPEC+ production outside of the US is facing challenges similar to the situation with the US shales. In their most recent report, the IEA reports that non-OPEC+ production outside of the US was down 500,000 b/d in March compared with a year earlier. The IEA projects production from this group will grow throughout the year and that by 4Q21, supply will be 700,000 b/d higher than a year earlier. We disagree with this assessment and expect production will fall short by as much as 400,000 b/d, if not more. Exploration outside of the shales has been extremely disappointing over the past decade and new project sanctions have barely been able to replace base declines. Given the capital budget curtailments around