a quote of interest for rbm shareholders

Hello Everyone,

A Quote from Mineweb via www.kitco.com :-

DENVER GOLD FORUM

FCX's Adkerson bullish on copper long term

After decades as a major miner, Freeport-McMoRan CEO Richard Adkerson isn’t deterred by metals price corrections, a shortage of major projects, or even a pit wall collapse blocking access to high grade ore.
Author: Dorothy Kosich
Posted:  Thursday , 11 Sep 2008

RENO, NV - 



Despite tough times in metals prices, Freeport-McMoRan Copper & Gold President and CEO Richard Adkerson insisted "the factors that have been supportive of the markets positively continue."

In a presentation to the Denver Gold Forum Wednesday, Adkerson said the global copper production shortfall has averaged almost 800kt per year. "The industry is going to continue to be challenged to meet production targets," he warned.

Basically, Adkerson suggested that the world's mega-copper mines are aging, ore grades are falling, and operational issues are increasingly complex.

Adkerson noted that copper prices have been volatile, reaching a record $4.04 per pound in July and ranging between $3.14-$4.04/lb in the current quarter. Among the factors impacting recent copper price performance is market sentiment concerning a potential global showdown, the Chinese economy, the strengthening of the U.S. dollar and seasonal factors.

"The story for copper, particularly, has been the challenges of maintaining supplies," he noted. Despite the recent build up of copper in global exchange inventories, Adkerson said inventories have dropped 12,000 tonnes YTD. Current inventories represent less than five days of global consumption.

Among the positive fundamentals for the copper market are the absence of new projects, continued supply constraints, and urbanization in China and other developing economies, he said. Adkerson explained that China is approaching 30% of consumption of global copper supplies, while the U.S. has dropped to 10%.

Adkerson forecast that the world will need as much copper in the next 12 years as it has required over the last 22 years. He estimated that 300,000kt of the metal will be needed annually between 2008 and 2020 with 32% of that demand coming from China.

Among the current challenges of new copper development is "the cost escalation in our business has been dramatic," according to Adkerson. Relatively few major copper projects are on the horizon, while  most will be of a lower grade quality than in the past.

The delays being encountered in new copper projects include technical considerations, such as complex underground development; environmental; and geopolitical factors, specifically resource nationalism, he explained. Meanwhile, the structure of the international copper industry is still evolving from consolidation of major companies.

To meet growing copper demand, Adkerson said FCX has budgeted $240 million in copper exploration this year. Currently 80 Freeport drill rigs are operating globally with another 12 rigs to be added during the fourth quarter.

Adkerson also discussed the impacts of a small scale pit wall failure at its flagship Grasberg open pit mine in Indonesia. The failure involved 75,000 tonnes of material, which is now restricting access to the high grade section of 7 South. "It is, in the near term, going to affect our access to the high grade material. Even though it's a small amount of material, in it there's a large amount of copper and gold, he said.

As a result of this event and changes in short-range mine plans, Freeport lowered its estimated 2008 copper sales by 65 million pounds (1.6%) to 4.03 billion pounds, and gold sales estimates have been dropped by 200,000 ounces to 1.2 million ounces.



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/ End Quote. No doubt You will remember that RBM are only going to be Mining down to 100 Meters.

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Regards,

moly