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New York, NY –January 27, 2022 – Copper is set to face critically low inventory levels over the the next few years, despite prices hovering near their all-time highs. According to a Rystad Energy forecast, the copper market will be in a 6-million-ton deficit by 2030, thanks to several international factors including projected economic growth in India, and the buildout of EVs in China. Last year, the Financial Times published a feature showing how clean energy was creating a copper boom and driving a commodities supercycle. In the report, it was highlighted that “It is becoming increasingly difficult to find high grade copper projects in safe mining jurisdictions.” Moving into 2022, there has been a response from copper miners large and small rising to the challenge of seeking copper sources from safe and accessible zones, including developments from CopperCorp Resources Inc. (TSXV:CPER), Teck Resources Limited (NYSE:TECK) (TSX:TECK-A), Rio Tinto Group (NYSE:RIO), Freeport-McMoran Inc. (NYSE:FCX), and BHP Group (NYSE:BHP).
Fresh off of a January 14, 2022 initial public offering, newcomer CopperCorp Resources Inc. (TSXV:CPER) is built to source reliable and responsible copper within stable, democratic governments.
The newly-minted public company operates in an underexplored district of western Tasmania in Australia. Recognized as a tier-one jurisdiction, the region is known for its mineral potential, favorable geopolitical jurisdiction, historical mining, and ongoing exploration successes.
“There are a lot of copper deposits in the world, but it is difficult to find large deposits in good jurisdictions,” says Stephen Swatton, CEO of CopperCorp, who brings extensive international exploration experience with major mining companies. “You go back to the jurisdictions you know, and make sure you’ve turned over every stone.”
Freshly stocked with a war chest of $11 million in funding to start, CopperCorp is determined to develop their flagship asset, the 100%-owned Alpine copper project.
The Alpine property is a massive property spanning 95km2, with over 30km of strike length and eight priority copper and copper-gold prospects identified within its license.
CopperCorp’s team of veteran mine-finders bring their experience from majors such as BHP Group (NYSE:BHP), Lundin Group, Ivanhoe Mines, Phelps Dodge. A National Instrument 43-101 resource report is pending.
According to Swatton, there are a lot of prospects in that area that haven’t been looked at for many years. In particular, CopperCorp’s area has been drilled in the past but has not been viewed as a district and interpreted as a whole.
“All the major companies would be eager to consider opportunities like Alpine,” addsSwatton. “It is district-sized with the potential to host multiple mines in a safe jurisdiction, one that is powered by 100% renewable energy.”
According to an executive from BHP Group (NYSE:BHP) last November, global markets will need at least double the copper it has now before a “green recovery” involving decarbonization can occur.
“Some of the modelling that we have done showed that in, let’s say a decarbonised world … the world will need almost double the copper in the next 30 years than in the past 30,” said Vandita Pant, BHP’s Chief Commercial Officer, at the FT Commodities Asia Summit.
However, BHP has been met with plenty of challenges, having recently reported its full year copper production was trending towards the low end of its guidance range of between 1.59-1.76 million tonnes.
The mining giant also recently announced it had entered an 18-month agreement with Capstone Mining to conduct drilling and collect metallurgical samples at its Copper Cities project, located in Arizona, just 10 km east of Capstone’s Pinto Valley copper mine.
“We believe Copper Cities is geologically a mirror image of Pinto Valley with the same host rocks and age,” said Capstone senior VP of strategic project and exploration Brad Mercer. “Our plan currently underway calls for a C$6.7 million two phase drill program aimed at twinning historical drill holes and to select a portion of these for metallurgical testing.”
BHP has also been rumoured to be building up its takeover team for a potential major deal that could include acquiring US copper giant Freeport-McMoran Inc. (NYSE:FCX), which has copper operations in North America, South America, and Indonesia.
However, Freeport has a string of aging U.S. copper mines which could ultimately cost billions to close. Getting out ahead, and in an attempt to increase its future copper supplies, as per their Q3 2021 presentation, the company still has multiple growth opportunities on deck, including two slated expansions in Arizona.
Bolstering its ESG reputation, Freeport-McMoran is also set to convert its mining trucks to green power.
“We have to make investments to reduce carbon emissions,” said CEO Richard Adkerson. “We’re going to do that. It’s going to cost some money.”
Teck Resources Limited (NYSE:TECK) (TSX:TECK-A,TECK-B) was recently recognized as one of the 2022 Global 100 Most Sustainable Corporations by Corporate Knights, for the fourth straight year.
Despite coming off of severe weather impacts on its operations in British Columbia, caused by heavy rain, flooding and mudslides, Teck announced that it had no impact on production at its Highland Valley Copper operations. However, up to 4,500 tonnes contained copper in concentrate sales were said to be at risk of being delayed into the first quarter of 2022 due to logistics chain disruptions.
Aggravating things further, Teck was later hit with a strike notice at Highland Valley in mid-January. However, over the weekend, the two sides announced they’d struck a new collective agreement, replacing the one that expired on September 30, 2021.
“We are pleased to have reached a collective agreement that is fair to employees and supports the long-term success of Highland Valley Copper Operations,” said Matt Parrilla, General Manager, Highland Valley Copper Operations.
A green-energy supporting project recently went sideways for Rio Tinto Group (NYSE:RIO) in Serbia, where the country’s ruling party had initially showed support for lithium and copper mining, only to revoke a lithium license in response to protests. Rio Tinto said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.
Meanwhile the company is also facing issues in Mongolia, where the pandemic remains a threat to copper exports, stating in its Q4 2021 operational report: “We continue to work closely with the Mongolian and Chinese authorities and our customers to manage the risk of supply chain disruptions. Cross-border concentrate shipments into China have resumed with some measures in place to transport greater volumes in a safe and efficient manner, however uncertainty continues to exist with the rate of Covid-19 cases in Mongolia.”
As the rush to decarbonize rolls on, the market will be tied to major shifts including the switch to EVs on the roads.
“One wonders if there isn’t a lot of hype for some of these forecasts for demand growth for copper and other metals because of EVs, but I think it isn’t hype,” said Canadian economist, Patricia Mohr. “It’s actually mostly going to be reality.”
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