Copper to the World

The looming copper deficit has been widely recognised across the world, and the main message from last week’s Copper to the World Conference in Adelaide, is the need for plenty more investments in copper in order to meeting upcoming demand.

The past six years has only seen marginal increases in new copper development projects and this isn’t due to the fact that there aren’t many being discovered.

There has been long-running trend of dropping grades and reserve exhaustion at the world’s current major copper mines, with many of these expected to cease production in the coming years.

Copper deposits are not being discovered quickly enough to meet upcoming demand.

Vanessa Davidson, Director of Copper Research and Strategy at CRU, announced that the pipeline of world class projects heading towards the point of production, remains thin, with only three new major deposits labelled as ‘firm’ for the coming three years. 

However, a significant number of smaller projects have been given the go ahead with many of these expected to start production during 2019.

All of these factors tie in to the overall demand and supply issues forecasted for the red metal. 

Copper is a globally fundamental prerequisite for the survival of civilisation as we know it, and the socially driven high pressure commitment to urbanisation. Copper is the second best metal for conducting electricity, making copper wiring crucial to modern day life.

In addition to this, the fast paced growth of the electric vehicle market has impacted CRU’s global demand growth forecast which has seen a jump in growth over the past 12 months.

The predicted growth has increased by 1.1 million tonnes for 2025 and 2.7 million tonnes for 2035 – with a significant portion of this due to the infrastructure needed for the EV market.

To maintain the current supply levels, there will need to be a number of new projects brought through to production – CRU stated that almost all uncommitted projects are required by 2035.  

Ms. Davidson stated that the most potential for production in located in South America.

As the world comes to terms with the inevitable shortfalls in copper over the next decade, SolGold has been growing its tier one copper gold resource at the Cascabel Project in Ecuador.

SolGold’s CEO Nick Mather said, “We still haven’t defined the edges of the Alpala deposit. Every new drill hole we complete, continues to grow our resource estimate. We believe SolGold is in the ideal position for the forecasted demand and upcoming supply issues.

SolGold is the largest tenement holder throughout Ecuador, actively exploring approximately 3,200km2, additional to its Cascabel Project.

Ecuador is the most underexplored area of the rich Andean Copper Belt – which is renowned for producing almost half the world’s copper.

We saw a “gold rush” of companies entering Ecuador in 2017, after the prospectivity of the country was realised by the majors, and more than 300 new concessions were granted.

There is no doubt we will see a number of new copper mines coming out of Ecuador over the next ten years, and SolGold has first mover advantage.

The Alpala deposit looks increasingly likely to find itself in development at just the right time when copper supplies hit a global frenzy.