copper price must riseWhen you have top quartile producers shutting production and threatening to leave countries like zambia and congo due to costs getting out of control you know there must be a problem with the level copper is priced currently . And it is not just African producers , south american operations are all feeling huge strain right now cutting capex as much as possible . Wage hikes over the last decade have been astronomical accounting for most of the cost increase - chilean miners now make as much as american miners , yet african mine workers still only make half that . Producers having to mine lower grade ore have driven costs up . If the world still needs copper for grid expansion , electric vehicles, green energy and upgraded power transmission systems then it must be prepared to pay a higher price . Cost increases have also come from most countries now demanding large royalties and partial ownership of mining operation . Something has to give and I doubt it will be countries struggling to raise their populations out of poverty .
Also we must consider how much financial stress so many large producers are now feeling . If copper were to head much lower and stay there for years then glencore ,freeport , anglo , first quantum could all face defaulting on loans worth tens of billions ... copper supply would drop , building out infrastructure in developing countries would come to a halt as their revenues dropped and they would also face default causing a financial crisis worse than 2008