INTL COPPER CONF: Hurdles to develop mines could exacerbate copper deficit

A predicted deficit in the copper concentrates market could be exacerbated, with mining companies facing ever greater hurdles to bring new projects on stream, according to panellists at the Metal Bulletin Copper Conference.

The copper market has for years experienced declining ore grades at major mines, and this combined with consistent demand growth could lead to deficits in the coming years, according to analysts at Goldman Sachs, who see prices reaching $8,000 per tonne this year.

But mining companies are finding it more difficult to bring projects through from exploration to commercial production, panellists said.

“To build a large volume project from the outset until production is at least ten years, so the capacity today for the mining industry to react to increased demand is not as it was before,” Codelco commercial vice president Rodrigo Toro said.

Modern projects need to pay closer attention to community liaison and water availability at a time of increasing scarcity.

Mining development permits for projects in Australia that used to take 18 months to obtain, now take around four to five years, Delloite partner Tim Biggs said.
“These requirements are good for the world in general, but for miners it has meant that the go/no-go factor is so much bigger. It takes so much longer so the obvious consequence is that many [copper mines] are not being made,” Biggs said.

Copper mining companies are slowly coming back to the idea of raising capital expenditure after copper prices dropped below $2 per lb [$4,400 per tonne] as recently as January 2016.

“A lack of exploration leads to a lack of projects and that causes a lack of supply,” Atlantic Copper ceo Javier Targhetta, who is also senior vice president of marketing and sales for Freeport McMoRan, said.

The heightened risk of economic nationalism is also turning companies off investing in new projects, Targhetta added.

This week executives from companies such as Glencore, Randgold Resources and Ivanhoe are in the Democratic Republic of Congo attempting to dissuade the country from bringing in higher taxes on raw material mining.

Board level blues
Mining companies have had their hands burned on large-scale investments in recent years, heightening the reluctance to make similar investments.

In 2016, the ceo of Polish state mining company KGHM labelled his predecessor’s purchase of rival producer Quadra FNX and the Sierra Gorda copper project “a mistake”.

“I think boards are much more nervous about committing to these enormous projects, particularly because it takes so long to get to a cashflow positive position,” Delloite’s Biggs said.

Traded spot copper concentrate TC/RCs dropped to their lowest levels since 2013 as traders bid aggressively for tonnes ahead of an expected mine deficit.

What to read next
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
LME copper prices took a significant hit following US President Donald Trump's announcement of a potential 50% tariff on copper imports. The uncertainty surrounding the timeline and implementation of the tariff has left market participants hesitant, with analysts noting its immediate impact on price momentum and trading activity.
The purpose of this review is to ensure that the index continues to accurately reflect prevailing market conditions. We welcome feedback from industry participants on potential amendments to the base specification. This consultation, which is open until August 9, 2025 seeks to ensure that our methodologies continue to reflect the physical market under indexation, in […]
Fastmarkets has launched MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonne on July 9 due to an expected increase in Indonesia-origin aluminium exports. MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonneQuality: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications. Ingot, T-bar, sowQuantity: Min 500 tonnesLocation: FOB IndonesiaTiming: […]
Information came to light that mill buying offers had been adjusted for July following Fastmarkets’ settlement of these prices on that date, leading to an incorrect published assessment for the following grades: MB-STE-0789 Steel scrap No1 heavy melting, consumer buying price, fob Montreal, Canadian $/net ton was previously published at C$245 ($179.41) per net ton, a C$10 […]
Mexico’s production and consumption of long steel fell year-on-year in May due to weakness in the country's construction sector, but posted a month on month gain, according to the latest data from the Mexican steel chamber, CANACERO.