Copper Concentrate Bottleneck Creating Competitive Search-Nedbank

ISTANBUL, Mar 11, 2011 (Dow Jones Commodities News via Comtex) -- There's not likely to be enough copper concentrate available to supply demand for refined metal, an executive of Nedbank Capital said Friday, forcing consumers to develop new mine deposits or compete to invest in existing projects.

The bottleneck situation is already forcing the biggest concentrate consumer, China, to seek stakes in mines outside the country in order to meet some of its needs, but this still won't be enough, said Mark Tyler, head of mining and resources.

"China has bought stakes in foreign mines...This is set to continue and grow dramatically, but it's not enough to meet the country's growing needs," Tyler told the Metal Bulletin conference in Istanbul.

"It's very difficult to supply the total metal demand from available concentrates supply," he added.

Around 78% of the 4.433 million metric tons of blister copper growth will be produced by China, with the remainder coming from countries like India with 9%, Iran with 4% and Zambia with 3%, Tyler said.

"Potentially deposits are not available any more, so companies are looking at different kinds of deposits and need to develop different ways to find them," he added.

Mergers and acquisitions are on the up as a result. According to Tyler, the value of mining M+A rose to $113.7 billion in 2010 from $60 billion in 2009, with the number of "mega deals" rising to 23 from 13 in the period.

Banks are using a long-term copper price of between $7,200 a ton and $8,000/ton when considering financing projects, Tyler added.