euroz re-rated avm @ 80c!, page-5

peak copper ? All those an*alysts predicting a substantial drop in the POC may just be dreaming?
(thanks to Vegemite on SS)

Beaty: Copper may be approaching Hubbert's Peak
By: Dorothy Kosich
Posted: '09-DEC-05 05:00' GMT © Mineweb 1997-2004

SPOKANE, WASHINGTON--(Mineweb.com) Vancouver-based mining entrepreneur Ross Beaty, the founder of several copper exploration companies, Thursday said he believes that the mining sector may be approaching a "Hubbert's Peak" for copper.

In a presentation to the Northwest Mining Association convention in Spokane, Washington, Beaty--the Chairman of Pan American Silver--predicted that the bottom line may mean that low-grade copper deposits will have to be developed internationally to keep up with soaring demand for the metal. However, he added, copper prices would have to go even higher to make the development of these deposits feasible.

"You have an inventory squeeze right now," Beaty explained, which could spike copper prices to over $2 per pound. He noted that no shock absorber currently exists in copper markets. Meanwhile, Beaty said that only 56 new copper discoveries have been made during the past three decades.

Beaty described such supply-side industry dynamics as smelter and refinery bottlenecks, which are slowing supply and keeping prices high. He explained that 21 of the 28 largest copper mines in the world are not amenable to expansion, while many large copper mines will be exhausted between 2010 and 2015.

The lack of water in Chile's regions I and II will slow expansion and development, Beaty asserted. Meanwhile, Chilean mine production will peak in 2008 and then decline, he predicted.

Beaty explained that environmental, social and political issues will inhibit mine development in the United States, Indonesia, the DRC, and Russia. Meanwhile, new discoveries in Mongolia, Ecuador and the Congo may be tough to develop, he added.

Beaty claimed that a profound change has occurred in the consumption of all metals. In China, for instance, he believes predicted that strong oil prices will fuel massive hydroelectric, nuclear and coal power infrastructure investments, and provide incentives to use hybrid vehicles, which use four times more copper.

Among the current trends described by Beaty: "Globally, economic copper resources are being depleted with the equivalent production of three world-class copper mines being consumed annually; meanwhile, copper demand is increasing by more than 575,000 tons annually and accelerating."

To profit from these trends, Beaty urged investors to buy stock in mining companies. He predicted that while the price of physical gold and silver will probably increase 10%, mining stocks have the potential to realize a 20% increase.