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Copper Demand Skyrocketing in Green Tech Boom: Markets Watch


Lauren Miller

June 3, 2024 - 14:49 pm


Global Copper Crisis: A Dire Warning for the Energy Transition

In the face of an accelerating energy transition, the demand for copper, a key component in green and renewable technologies, has been soaring. Amid this surge, concerns regarding the adequacy of copper supply are mounting. The International Energy Agency (IEA) has issued a formidable warning: by 2030, the current mining projects and operations will only satisfy a mere 80% of the global copper demand. This looming shortfall is especially disconcerting given the colossal timespan - an average of 23 years - required to inaugurate a single copper mine. As the primary copper producers are located in Latin America, particularly in Chile and Peru, geopolitical uncertainties continue to overshadow the mining industry in these nations. Adding tension to the scenario are projections from hedge fund magnate Pierre Andurand, anticipating copper prices to quadruple to an unprecedented $40,000 per metric ton in the coming years. Goldman Sachs also foresees record-shattering copper prices by the closing of 2024. In the midst of these pressures, there is a unified chorus advocating for the escalation of domestic mining projects to safeguard a steady supply, with market focus turning towards major copper miners such as Rio Tinto Group (NYSE: RIO), BHP Group Limited (NYSE: BHP), Lundin Mining Corporation (TSX: LUN) (OTC-Pink: LUNMF), Southern Copper Corporation (NYSE: SCCO), and the emerging Yukon Metals Corp. (CSE: YMC) (formerly CSE: JKS).

Yukon Metals Corp: Joining the Copper Race

Yukon Metals Corp. (CSE: YMC) clearly comprehends the severity and urgency of the situation, throwing its hat into the ring of copper exploration with decisive intent. Poised at the starting line, Yukon Metals has announced its entrance under a new appellation and trading symbol, bolstered by an acquisition of a sterling-quality portfolio meticulously compiled by the Berdahl family, a team with a three-decade legacy of prospecting, integral to the establishment of Snowline Gold's portfolio of primary gold assets.

"We're embarking on an exhilarating journey with the procurement of these eminent exploration properties in the Yukon," expressed Rory Quinn, President and CEO of Yukon Metals. "Our asset collection is not only extensive but exceptionally promising. We're setting out to advance these sites responsibly and methodically, targeting a diverse array of minerals from copper-gold and silver-lead-zinc to precious metals. Fortified by a robust treasury, exceeding C$15 million from recent fundraisings, access to a thorough exploration database, and crucial permits already acquired, we're prepared to commence our operations without delay," Quinn added enthusiastically.

The acquisition from the Berdahl family's 18526 Yukon Inc. has furnished Yukon Metals with an eclectic array of properties, spanning copper-gold, silver-lead-zinc claims, all with significant potential for gold and silver yields.

Exploring the Yukon: Geographical Riches

A closer inspection of the portfolio reveals compelling projects such as AZ, Barite Mountain, Birch, Carter Gulch, Eva, Expo, Faro North, Fox, Gem, Star River, Nut, Pete, Risby, Talbot, and Venus claims, which, collectively, cover an area of approximately 18,000 hectares across the Yukon. These claims rest on a bedrock of substantial historical data and are supported by modern exploration permits, which places Yukon Metals in an advantageous position to undertake immediate and systematic exploration pursuits aimed at uncovering the region's hidden treasures.

The Expo claim, positioned within the mineral-rich Finlayson VMS district, stands out with a wealth of historical information and a firmly established exploration permit, rendering it an immediate exploration focus. Furthermore, the AZ claim exhibits encouraging signs of copper, silver, and gold mineralization, reflected in its compelling historical assay values. Meanwhile, the Birch and Talbot properties have been spotlighted due to their remarkable gold-in-soil anomalies and elevated assay results for a triumvirate of elements: gold, silver, and copper. Emphasizing accessibility, the Star River project boasts a history of high-grade silver and lead occurrences, hinting at substantial exploratory prospects. The Nut property, nestled in the Mayo plutonic belt, has demonstrated promising preliminary findings for both gold and copper, thereby underscoring its potential for significant discoveries.

"I am privileged to steer such an experienced and adept team," Quinn stated. "We're gearing up to unveil crucial appointments and breaking news in the imminent future. Our dedication to creating value for all our stakeholders remains steadfast as we steer our exploratory projects towards notable discoveries."

Rio Tinto's Strategic Shift Amid Legal Hurdles

Even as Rio Tinto Group (NYSE: RIO) navigates through the turbulent waters of a class action lawsuit in Papua New Guinea, the mining colossus has signaled a resolute shift towards the development of new copper mines over acquisition strategies. This pivot aims to fuel the company's ambition of amplifying its copper production to an annual total of one million tonnes within a five-year time frame. Most of the expansion is anticipated to be driven by operations in Mongolia and Utah, supplemented by global exploration endeavors, including a collaborative venture with Chile's Codelco, the reigning titan of copper production.

"Our primary objective revolves around organic growth and bolstering our supply capabilities. Our strategy is to collaborate on projects rather than merge with existing productions," declared Bold Baatar, Rio Tinto's Chief Commercial Officer, at the CRU World Copper Conference in Santiago. "Mere consolidation doesn't augment the copper supply. The pivotal question is: how do we usher in additional supply?"

BHP's Continued Copper Chase after Anglo American Bid Collapse

The withdrawal of BHP Group Limited (NYSE: BHP) from its audacious $42.7 billion bid for Anglo American has left the industry speculating on its next strategic move. Rumors suggest BHP may now be harboring ambitions towards securing a partnership with Rio Tinto, the second-largest global player in the metals and mining sector. The selection of Anna Wiley, BHP’s Asset President Copper South Australia, as the keynote speaker at the upcoming Copper to the World 2024 event in South Australia, is a testament to the company's unwavering focus on copper.

Analysts from Macquarie project BHP's copper output to culminate at approximately 1.9 million tons in 2026 before a gradual descent to about 1.6 million tons by 2028. This forecasted trajectory is predominantly driven by an expected downturn in production at the Escondida mine, projected to plummet from its zenith of about 1.3 million tons in 2025 to the vicinity of 900,000 tons by 2028. This emphasizes the necessity for a steadfast pursuit of novel resources to bolster its standing in the industry.

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Lundin Mining Eyes Argentine Opportunities

Elsewhere, Lundin Mining Corporation (TSX: LUN) (OTC-Pink: LUNMF) is ardently working to unlock the expansive copper deposits nestled within the Andean regions of Argentina. The company, later this year, seeks to secure a tax stability agreement for its Josemaria copper project in San Juan, Argentina. This strategic move, following the successful acquisition of a major stake in Chile's Caserones Copper-Molybdenum Mine last year, could bolster Lundin Mining's presence in a more amenable tax domain. Yet, expansion plans for the existing Candelario mine also remain afoot, according to Reuters’ reports.

"Our acquisition of a majority stake in the Caserones copper mine is proving essential to our continued growth in revenue and production," stated Jack Lundin, President and CEO of Lundin Mining, in the Q1 2024 financial results report. "Comparing the first quarter revenue and copper production to the previous year, we've seen an increase of 25% and 43%, respectively. Expectations for productions at Candelaria are high for the second half owing to higher grades anticipated from our planned mining sequence. We’re confident in meeting our goals for production and cost efficiency for the year."

Southern Copper Aims to Launch Peru's Tia Maria Mine

In Peru, Southern Copper Corporation (NYSE: SCCO) has reportedly set its sights on initiating the Tia Maria mining project later this year, with potential commencement of mining activities slated for the latter part of 2027. The project has faced continuous stalls due to environmental concerns and community opposition, leading to protests and political restlessness. However, with new government endorsement, the project appears geared for a revival.

"The collective and national significance of this project is finally being recognized," stated Raul Jacob, CFO in an interview. "Successfully bringing Tia Maria to fruition by the termination of 2027 would inject an additional 120,000 metric tons of copper annually into the market."

Activating Tia Maria is deemed instrumental for Southern Copper to consolidate its annual copper production well beyond the million-ton mark, and it also promises to be a monumental step forward in ameliorating the typically strained relationships between the mining industry and secluded rural communities in Peru.

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Note: The information provided in this article is for informational purposes only and does not constitute investment advice. USA News Group is a subsidiary of Market IQ Media Group, Inc., which has received compensation for advertising and digital media for Yukon Metals Corp.

Source: USA News Group