Copper Prices Poised to Rebound Amidst Supply Shortages and Growing Demand
Despite a significant drop in copper prices, falling 20% in the past two months, analysts from major banks such as BMO, Citi, and Goldman Sachs predict a rebound. Factors such as supply shortages from Chinese smelters and limited mine supply are expected to drive prices up again. According to the Financial Times, the world's largest copper miners anticipate closer collaboration with end users as shortages loom. A study by the International Energy Forum warns that the world needs 55% more copper mines to meet electric vehicle (EV) transition goals. Key industry players like Usha Resources, Freeport-McMoRan, Rio Tinto, BHP, and Lundin Mining are gearing up for this surge in demand.
Usha Resources recently announced plans to acquire a 100% interest in the Southern Arm copper property from Abitibi Metals. This comes as Usha divests up to 90% interest in its Jackpot Lake lithium asset for $26.025 million, marking a 1,300% return on investment after spending approximately $1.835 million on the project since 2022. CEO Deepak Varshney highlighted Usha's strategic vision of acquiring and monetizing undervalued assets, now shifting focus to copper and other critical metals. The Southern Arm asset hosts a 7.3 km copper-gold trend within the same volcanic rock group that houses the nearby Selbaie Mine.
"We are excited to partner with Abitibi Metals on Southern Arm, establishing Usha as a diversified metals company in North America," said Varshney. "We plan on completing a fully funded maiden drill program this coming Fall."
In Chile, Freeport-McMoRan is advancing with a $7.5 billion expansion of its El Abra copper mine. The project, expected to take seven to eight years due to permitting requirements, will see Freeport submitting an environmental impact statement by the end of next year.
Freeport owns 51% of El Abra, with the remaining held by state-owned Codelco. CEO Kathleen Quirk emphasized the project's necessity to meet long-term copper demand trends. The mine produced 98,400 metric tons of copper last year, and the expansion could yield 750 million pounds of copper and 9 million pounds of molybdenum annually.
Rio Tinto Group, despite an increase in iron output, warned that its full-year copper output would be at the lower end of its guidance range. The Oyu Tolgoi underground mine in Mongolia saw a 23% output increase, with higher ore grades from Escondida in Chile contributing to an 18% rise in overall copper output, totaling 171,000 tons.
