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Conger, who is president and chief operating officer (Americas) for the US copper producer, said that the deficit is expected to reach 4.2 million tpy despite positive changes in efficiencies through technology and other methods, which will help to produce more copper over time than had been expected.
He told the American Copper Council’s Copper College meeting – which runs May 7-10 in Denver, in the US state of Colorado – that the average copper grade for global mining operations last year was 0.85-0.9%.
“This means you have to process more and more material just to make the same amount of copper,” he said. “With rising copper demand, miners have to work their hardest just to stay in place, let alone produce anything additional, which requires much more effort.”
New discoveries are rare, Conger added, and those that are producing today date from the late 1800s. There are very few significant copper mine projects in the pipeline, and community and permitting issues can often create delays and further uncertainty, he said.
“Right now you hear about [companies] being cautious. Balance sheets are repaired, and there aren’t a lot of people rushing in to invest right now,” he told the audience. In addition, development times can run for years, from exploration through design to permitting and construction.
“It took us ten years just to permit Safford,” he said, referring to Freeport’s open-pit copper mine in the US state of Arizona.
It is also difficult to know where copper prices will be by the time new mines come onstream; according to Conger, forecasting future prices is not a focus for Freeport.
“One other aspect of when miners respond to increases in demand is that supply comes in big pieces,” he said.
“Mine production is chunky; [it is] not like producing cars. When you permit a mine operation, it’s a huge capital investment, it takes a long period of time and it’s generally a great big chunk of production [that] comes out of that facility that miners decide to build,” he added.
“If there are several [new mines] coming on at the same time – which often happens when prices go up and people are incentivized to go out and make investments – they all make them at roughly the same time. [So] supply comes on at roughly the same time – you see chunks of supply coming on,” he explained.
Similarly, there are often periods when production increases stagnate, he told delegates: “There’s no way to predict the future.”