copper, page-18

Very interesting.

I reckon it could be an almighty bounce then on copper prices. Other metals have been hammered also...but copper is the play I want.

Maybe copper will do a quick jump to $2 a pound.

60 days ago...copper was over $2.50

In july of this year it was $4 a pound.

I can see a bounce coming as there are people pulling out of supply...putting production on hold...should see a reduction in supply down the track.

Here is the article.



Japan woos Latin America's copper prospectors

Fri Dec 5, 2008 3:14pm EST

SANTIAGO, Dec 5 (Reuters) - Standing before hundreds of mining executives in Chile this week, an official of Japan's mining sector had a simple message for Latin America's exploration companies: If you think you have found copper in the ground, let's talk.

Japan, the second-largest global processor of copper concentrates, wants to secure steady supplies to feed its giant smelting industry and is looking to team up with prospectors at the exploration stage.

"Our interest is to support this risky phase for mining projects, the early stage of exploration," Natsumi Kamiya, deputy director general for metals strategy for the state-run Japan Oil, Gas and Metals National Corp (JOGMEC), told Reuters in an interview this week.

Japanese smelters are struggling to lock in a supply of concentrates -- crushed rock containing concentrated mineral in a fine powder -- because of industry consolidation that has left much of the raw material production in the hands of a few companies.

Japan is in a drive to guarantee long-term concentrate supplies to its giant copper smelting industry, which is expected to produce 1.6 million tonnes of copper this year.

It is also looking to a future when copper supplies become tight again and slumping prices for the industrial metal recover after plunging more than 65 percent since July amid the global financial crisis.

"Resource potential is the most important thing we are looking for. Chile has been the main destination of our investments, historically, but now not only Chile but Peru is important," Kamiya said.

ON THE PROWL

Japanese companies already have stakes in major copper mines in Chile, the world's top producer, including the world's largest, Escondida. But they are on the lookout for more, and top world consumer China is doing the same.

JOGMEC, charged in part with ensuring a stable supply of nonferrous metal and mineral resources for the nation's needs, has a 1 billion yen ($11 million) per year budget to fund junior exploration companies.

Once it finds a project, JOGMEC auctions development rights to Japanese companies.

"We have already transferred five projects to Japanese companies in the last four years," Kamiya said after a speech to Chilean mining executives. He said it could take between five and 10 years to put those into production.

Kamiya said the JOGMEC hopes to change that by boosting the stake of Japanese companies in the mines that produce copper concentrate for its smelters to as much as 70 percent in coming years from about 40 percent currently.

"You're hostage to your supplier," said Jon Barnes, a top copper analyst at London-based CRU think tank. "So it's a generally sort of sensible policy to be secure in your sources of supply and know further down the line what projects are out there that could be sources of supply."

Juan Carlos Guajardo, executive director of Chile-based CESCO, a not-for-profit copper industry think tank, said Japan's interest in controlling more concentrate supply suggests it expects copper prices to rebound.

Copper was trading at $1.36 per pound on Friday, its lowest price since December 2004, as it continued to plunge from record highs of more than $4 per pound posted in July.

"What's interesting here is that Japan has realized it has to intensify its policy of guaranteeing supplies because there is more competition for resources," Guajardo said.

"This makes me bullish in the long-term."

Japanese metals companies include Pan Pacific Copper Co Ltd, Mitsubishi Materials Corp (5711.T: Quote, Profile, Research, Stock Buzz), Mitsui Mining and Smelting Co Ltd (5706.T: Quote, Profile, Research, Stock Buzz) and Sumitomo Metal Mining Co Ltd (5713.T: Quote, Profile, Research, Stock Buzz). (Editing by Simon Gardner and Jim Marshall)

http://www.reuters.com/article/marketsNews/idINN0540950820081205?rpc=44&pageNumber=2&virtualBrandChannel=0