The Rational Investor's Price for DML, page-8

"Copper still compels
Although copper prices fell around 8% between the end of 2013 and October 2014, the prospect of global supply shortfalls means many chief executives remain committed to seeing through investments in countries like the Democratic Republic of Congo (DRC) and Zambia.
"The outlook for copper demand remains compelling as emerging economies transition to consumption-led growth," said US-based Citibank in a recent report.
Drilling down deeper, a host of other factors come into play. Major international mining companies like Anglo American, Rio Tinto, Vale and Glencore tend to pay little heed to short-term price volatility, even over a three-to four-year period.
Instead, their strategy of investing throughout the commodity cycle is supposed to ensure that they lock in huge profits when global demand rises.
Rather than a commodity-centric approach, the view they take is to look at whether their individual assets across the world – their mines and processing plants – continue to meet required performance thresholds.
In this analysis, what matters more are things like tax and royalty rates, security and infrastructure.
In taking the temperature of the continent's mining sector, executives pay closest heed to its politics."


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