altona....start your engine !, page-11

Massive high speed rail construction in China, uses copper.
Obama is calling for rail infrastructure upgrade in US.
Electric grid in US needs upgrading also.
Trend in the future is towards building mega cities:
Urbanization and the accompanying necessary infrastructure build out - power, construction, energy and transportation – needed to accomplish developing countries urbanization/industrialization plans are obviously key drivers in increased copper consumption.

Copper is supported by:

- The growth in demand from Africa, China, India and other emerging markets
- Global infrastructure deficit
- A low interest rate environment bodes well for the whole resource sector
- The overall weakness in the U.S. dollar translates into support for dollar denominated metal prices

In the Scotiabank Commodity Price Index report for April Mohr said “Copper could still retest the previous US$4.60 record of February 14. Chinese copper fabricators destocked copper and produced 2.1% fewer copper semis in January and February due to credit restrictions and high prices. However a big seasonal pick-up in consumption in the second quarter will lift prices."

“We see renewed strength in the second half and you’ve got to be bullish copper for the next few years. The global recovery is becoming more broadbased and you’re not going to see any new mines coming on stream for at least this year.” Christin Tuxen, analyst at Danske Bank A/S

[ahem....well we have the mine in Finland...not 'new' no...but coming on board at exactly the right time]

Australian equity research firm Resource Capital Research (RCR) said it expects the copper market to move from a small surplus in 2010 to a deficit of around 400,000 tonnes by 2011.

According to JPMorgan Securities Ltd, the world refined copper market will have a 500,000-metric-ton deficit in 2011.

BHP Billiton Ltd. (BHP), the world’s largest mining company, said in January that output from their Escondida mine in Chile, the world’s largest copper mine, would drop by as much as 10 percent in the year ending in June because of lower ore grades.

Codelco, based in Santiago and the world’s largest copper producer, said on March 25 that supply from its mines fell for the fifth time in six years. London based Anglo American Plc and Kazakhmys Plc reported lower output this year.

Michael Jansen, metals strategist at JPMorgan Securities Ltd, predicts a deficit of 500,000 tons to 600,000 tons this year.

Macquarie expects a shortfall of 550,000 tons.

Morgan Stanley projects copper prices will average $4.45 a pound in 2011, up 24 percent from an earlier estimate.

Major infrastructure projects typically boost productivity throughout the economy. Massive stimulus packages that focus on creating jobs at home - through public works projects – will, in this authors (see below)opinion, become very popular with governments looking to generate massive employment and restart the global economy.

Interest in the junior mining space is going to become intense but there is still time for investors to capitalize on the coming infrastructure boom. Are junior resource companies, run by quality management teams with outstanding projects, on your radar screen? If not maybe they should be.

Richard (Rick) Mills
[email protected]

So, even with a short term faltering of US numbers for cars or housing construction...looking good.