cu supply 07 to 15 report 28pages

A 28-page report from Credit Suisse on Cu projects (Sep 14)

Maroochydore most likely will have excellent quotations
Right now we have only ABY's data on Nifty, here they managed to build a plant for less than $3,000 of pa Cu production. And that's were it's all about.
http://www.adityabirlaminerals.com.au/media/ASX-AGM_Presentation.pdf (slide26)


Credit Suisse:
...34 of the 66 new projects (representing 55% of new production capacity) are likely to cost more than US$6,000 per tonne to build, which, assuming a cash cost (net of by-product credits) of $0.80 per pound and an IRR target of 15%, implies a required long-term copper price of US$2.09 per pound, well above our original Brave New World estimate of US$1.50 per pound. The average of all 66 projects implies a long-term price of US$1.83 per pound

In this report, we have reviewed the 66 new copper projects currently in the pipeline that have the potential to bring on more than 8m tonnes of incremental capacity by 2015. However, most of these projects are in the early stages of development/exploration and we expect the supply to grow only by 2.3% in 2008. We believe this lack of near-term supply growth could keep the market in deficit and provide a platform for a significant spike
in copper prices. If all 66 projects are developed on time then the market could be swamped with copper from 2011–14, with 1.3m tonnes of new copper every year and an average supply growth rate 5.3% pa during that period. Under this scenario, demand
needs to grow by 4.3% pa to keep the market tight, which compares with 3.9% pa growth since 1997.

However, we believe that the ongoing shortage of labour and equipments, lower grades and upfront capex of US$66bn would curb the development of some of these new projects. To give effect to these delays, we have created a ‘likely’ scenario where we have assumed that every project from 2010 would be delayed by one year and only deliver 90% of the design capacity in the longer term. On this basis, we derive an average supply
growth of 3.6% pa for the next eight years under this ‘likely’ scenario.

Our demand analysis indicates that under the ‘likely’ supply growth scenario of 3.6% pa, if the Rest of the World (excluding China and India) continues to grow at 1% pa, Chinese and Indian copper demand will need to grow by 9% pa to keep the copper market in deficit for the next 10 years. This seems likely given Chinese copper demand has grown by 14.3% pa in the last seven years, while India has grown an estimated 8% pa.

http://www.minesite.com/fileadmin/content/content/Ambrian_Carbon_Report_-_One_day_delay/Baja_credit_suisse_pdf_sept_07.pdf
http://www.minesite.com/