NEW YORK, Jun 02, 2010 (Dow Jones Commodities News via Comtex) -- New copper mine supply is critical for the industry with the focus on concentrate production, Diego Hernandez, chief executive of Chile's state-owned copper producer Codelco, said Wednesday.
Even if all "probable" copper projects scheduled for completion by 2020 are finished, the market will still only meet 65% of the forecast consumption at that time, Hernandez said. After 2020, all the projects in the "possible" category will be needed, he noted.
"Delays to any of these projects will put the copper market under serious pressure," he said.
But there is a far lower number of large deposits available for development. By 2020 there will be 1.4 million metric tons of copper fewer than there were in 2005 from big deposits, Hernandez said. This means large deposits will account for around 39% of total output by 2020, from around 45% in 2005.
A significant number of the probable and possible projects are greenfield, which are "more expensive and uncertain."
Copper concentrate will dominate future supply, Hernandez said, with much smaller growth in production using solvent extraction-electrowinning, or SX-EW, technology.
"There are less oxidized deposits and less secondary sulfides available, so unless there's a technological breakthrough, there will be a continued switch to secondary ore, making concentrates even more important," he said.
Hernandez said the scale of Chinese urbanization promises "massive opportunities" for the copper industry, especially given supply constraints.
"The industry was unprepared for the surge in Chinese demand," he said. "New supply will be necessary in the near future," he said.
Hernandez, who took over at Codelco last month, was speaking at the Metal Bulletin copper conference in New York.