Copper Forecast with Rick Rule, Ivan Bebek, and Paul Harris
InvestorSarfari Comments:
At the recent Vancouver Resource Investment Conference, mining superstar Rick Rule, Ivan Bebek, and Paul Harris discussed all things copper. The highlights of these three entrepreneurial minds are worth a stir:
There’s been an under-investment in the copper business for the past 30 years due to a mentality of restraint. The consequences are glaring at us with red eyes at the end of a dark alley, and the ensuing shortages WILL bite hard.
Mining in general has become increasingly difficult because of a “not in my backyard” social attitude. Yet if we are to transition to new forms of energy, we must overcome this collective criticism to living in proximity to mining jurisdictions. Clearly we need to use common sense to find common ground.
Of several countries mentioned in the video, Chile (the world’s largest producer of copper) seems to be the ideal location to support an increasing need for copper. The political situation in Chile remains attractive. Since mining takes 10 to 15 years to fully develop from exploration to production, any possible political “disruption” would likely dissipate over the life cycle of a project.
The price of copper has been over four dollars a pound since 2021 – the highest it’s been in over a decade. The increase is partly due to the market realizing that the supply of copper is expected to diminish over the next 5 to 10 years. This mainly due to a lack of new copper deposit discoveries, and long timelines towards production. To truly face reality, we need only acknowledge that our current mines are nearing the end of their productive life cycle.
Copper demand and prices are expected to continue upward from a recovering global economy and the transition to green energy. The major supply crunch should be felt starting in 2025. It’s difficult to find major deposits that will impact the expected deficit, but Torq Resources might make an impact with their most recent project in Chile (still too early to make a call).
The impact of a copper deficit is still not fully absorbed by all the stakeholders. But the problem remains very real. Especially where the demand for electric vehicles is concerned. What could be more significant than selling green vehicles?
Answer: the dire plight of 1.2 billion people on Earth who don't have access to electricity. Another two billion people who only have intermittent access or unaffordable electricity. Copper is the primary ingredient for the electrification of the world.
The focus on people should be more relevant to the copper business than sales of electric vehicles. From the standpoint of ESG (Environmental, Social, Governance) policies, the bottom half of humankind desperately want access to first-world conveniences mainly made possible by electrification - electrification only made possible with copper wire.
As investors in the copper space, if we DON’T believe there will be a synchronized depression or recession in the world economy in the next five years, then widespread copper shortages are a certainty. If the belief is that we ARE headed into a global meltdown, then copper will not be of much use to anyone’s survival…
THIS is the thought dilemma weighing on the copper market.
For recent news on the political state of mining in Chile, visit this short article.
A brief dive into the discovery that Ivan Bebek is referring to, available here.