RE:RE:RE:RE:Why “Green Copper” Is in Soaring DemandYou should consider entering a new response above/on top of an ongoing thread to get a coherent chronology.
I knew the word everything was coming. The main point is that our primary source of energy is unaffected by inflation of hydrocarbons. Our purchases of higher-priced tires and plastic items are unlikely to wipeout the profits from $8 copper. The Chinese are supplying a lot of our big ticket items, I'd venture to say on a priority basis, from firms that care less about profits than a Western supplier does. No problem so far acquiring equipment to get Phases 1 and 2 online ahead of schedule. Phase 3 is a couple of years out, I think management has thought about it and we'll be OK. I know the big haul trucks and other vehicles come from Scandinavia so yes inflated but one-time purchases that will not erode profits on an ongoing basis.
Sure inflation will affect us but we are somewhat insulated from it compared to many mines that operate on hydrocarbons and most of it can be passed on to the end user. The price of Cu has to go up with inflation. If it doesn't then mines will start shutting down and remaining production will be more valuable ie. price keeps going up and we at the bottom of the cost curve, with highest grade, powered by hydro will be one of the last ones standing. Inflation is probably a positive for IVN if marginal diesel guzzling mines can't pass it on and have to shut down.
The idea that inflation is a threat to the investment thesis for IVN is FUD. You are talking about a world that turns away from using copper because it is uneconomical to mine it. If this is a plausible scenario to you why would you be holding this stock.
VellyJelly wrote: chintzy wrote: Inflation of what? If the bulk of the mining process is powered by hydro from Inga we shouldn't be affected too much by energy inflation and that is the big one to worry about along with food which affects us negligibly. Labour costs going up shouldn't hurt us too bad nor one-time purchases of equipment for ongoing development.
What about all that trucking of concentrate...some is going to the nearby smelter but plenty is being trucked to seaport? Dar is 2000km to the east and Lobito 1600km to the west, obscene distances to cover. Exposure to diesel inflation for sure, would be nice to get it onto rail. Smelter will mitigate this issue.
VellyJelly wrote:
chintzy wrote: Here you can read for the 20th time the same stuff you already know about the outlook for copper.
But that graph of copper demand coming over the course of this decade is always worth admiring.
And this is a new one to me, referring to China:
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It could reach some of its green energy goals faster than expected. For example, it planned to reach 1,200 gigawatts (GW) in renewable energy generation by 2030. But new estimates tell us that it could reach that target in 2026, according to the International Energy Agency.
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With copper at $8 or more in the coming years it will matter little how we calculate costs, they'll be insignificant compared to the massive revenue. https://www.caseyresearch.com/daily-dispatch/why-green-copper-is-in-soaring-demand/
Assuming inflation doesnt push costs up even more.
VJ
Everything. Oil is a component of everything. Its used to make tires and plastics, and its a cost in everything that is built or moved. Current price per lit 1.43 vs .95 a year ago. Heavy equipment costs double what it did 10 yrs ago if you can get it by ordering 16 months in advance. Official inflation in the usa is around 7% and over 5% in canada. Real inflation is more. Labour, insurance, you name it. So ok for cu producers so far as theyve been benefiting from a rising cu price. Not so for gold miners where the pog hasnt moved in the last yr other than for this weeks Ukraine mess which will resolve itself one way or another over the next month. Abx profit announced this week was down 13% ye over yr.
Everyone always talks about metals going to the moon but when gold for example trades at 5000$ we might be paying 30$ for a pair of underwear.
VL