Why is nobody buying the copper needed for a greener world?https://www.ft.com/content/b71d2cde-da1a-3164-99c8-021f8d77a45b
Excerpts from the linked article: At the beginning of October, the LME copper price has barely kept above $5,600 a tonne. That is above the cash operating costs for existing mines, but nowhere near enough to draw investment to new mines, assuming someone has found the stuff, measured the deposit, laid out transportation and water supplies, and arranged all the permits.
Mining equities prices are drifting to the sea floor, their remains only retaining some buoyancy through their inclusion in ETFs and broad indices. Oil and gas exploration and production companies may have their
That is no longer the case for “junior” metals mining companies. Jeffrey Christian, chief executive of CPM Group, a metals statistical and advisory service, says: “Junior mining is dead. I have been running CPM Group for 33 years, and for 32 of those years we were talking to people about investing in mining companies or metal. Now institutional and retail investors are simply not investing in junior mining companies, because they have lost money at it for so long.
“Instead, we are working on three continents with governments and industry associations to see what can be done about [the lack of new mine investment]. No one wants mining, but they want the product.”
Junior mining companies were long easy to caricature as tools of sleazy Vancouver or Sydney promoters, holes in the ground with liars on top etc etc. But they have been But they have been essential to the ecology of how people get metal to make electric bikes, cappuccino machines, server farms and sailboats to go to UN meetings. Major mining companies do not find new prospects. Juniors do. Then the majors buy them and develop them.
That machine is broken. And no, recycling old metal does not do the job because the green economy is more metal intensive than than the black economy. Also, we cannot stop the development of the poorer parts of the world to meet the richer world’s decarbonisation schedules.
A mining finance “fix” means higher prices. New mines require a lot of workers to excavate, pour (low-carbon) cement, build roads and railways, construct beneficiation plants and refineries, and monitor waste disposal.
A mining finance “fix” means higher prices. New mines require a lot of workers to excavate, pour (low-carbon) cement, build roads and railways, construct beneficiation plants and refineries, and monitor waste disposal.
Paul Gait and his team of metals mining analysts at Bernstein in London have come up with estimates of the copper price levels needed to finance new mines. “We believe copper needs to be priced at $8,800/tonne, or a 40 per cent uplift, to meet the government-agreed 2030 targets for decarbonisation.”
If you believe the current consensus targets are not adequate, Mr Gait and his team have a more ambitious “Greta Scenario” for complete decarbonisation by 2025. That would require no less than $20,000/tonne to produce the required copper.