A section of an article published yesterday by stock head:
In an interview with*Eagle Mountain Mining (ASX:EM2)CEO Tim Mason said because copper is a highly efficient conduit, it is used to generate renewable energy systems from solar, to hydro, and wind energy.
“For offshore wind energy alone, we will see a seven-fold increase in copper demand by 2040,” he said.
“That is going to be huge, the world needs to find multiple, new tier-1 copper projects which they haven’t found yet and even if they do find them, it will take about a decade to get them into production… and that is the best-case scenario.”
Meanwhile, companies have become conservative about investing in new projects due to the time it takes to discover, explore, permit, finance and develop new mines.
According to S&P Global, rather than investing in exploration and development to meet increasing demand, companies are focusing their attention on extending the mine life of profitable projects that already producing.
But from Mason’s point of view, more needs to be done from the government regulatory side of things to get projects online.
“The hindrances and hesitation by authorities to approve projects around the world is putting the decarbonisation goals at risk and companies are getting increasingly frustrated with the process that is at complete odds with the energy transition,” he explained.
At the same time, countries are grappling with an increase in ESG-related concerns which in turn, might limit the supply of crucial metals like copper and further derail the clean energy transition.
“It’s a really challenging environment, I think decarbonisation is going to be one of greatest challenges of this century.”
The time to invest in copper is now
Citigroup managing director for commodities research,Max Leyton told Bloomebergcopper prices might dip further in the short-term but could begin to rally in the next six to 12 months as the market fully recognises the massive imbalance between supply and demand.
Pic: Bloomberg
He said copper prices could reach $15,000 a ton by 2025 on the back of this widening supply gap as demand for EVs and renewables expands, and added now is an ideal time for investors to buy as the price of copper is still muted on global recession concerns.
Echoing this sentiment, Mason said it wouldn’t be unreasonable to see prices surge between 30 to 60% higher than where they are today by 2030.
“They could arguably go a whole lot higher than that – in fact, they need to get to that price point to incentivise these various marginal projects to come online,” he explained.
“But even if they do and at any price, I think the world’s going to be screaming out for the red metal and I don’t think there’s going to be any price which will magically make the supply appear to meet demand.”
ASX copper explorers
With that in mind, here are a bunch of copper explorers working hard at increasing resources through exploration to such a point where a clear pathway towards development and in the end, production is demonstrated.
Recent exploration by Eagle Mountain at its Oracle Ridge project in Arizona is moving towards another upgraded mineral resource estimate and ramping up technical evaluations for development.
The new MRE, now underway, will be based on extensive new knowledge gained from underground mapping and channel sampling, as well as incorporating all assays received from drilling since October 2022.
Currently, the MRE stands at 16.5Mt at 1.45% copper, 15.1g/t silver and 0.19g/t gold for 240,000t contained copper, 8Moz contained silver and 102Koz contained gold.
Evaluations will focus on assessing various mining scenarios, from a larger scale operation using the materially larger resource base at lower cut-off grades, to a smaller scenario using selective mining at high-grade targets.
