S & P: new discoveries of global copper mines hit a 30-year low

According to Mining.com, an analysis by S & P Global Market Intelligence) shows that most companies in the copper industry have been investing in brownfield (Brownfields) projects, coupled with the long time it takes to make discoveries to release reserves, leading to a continued decline in large discoveries that can change the fundamentals of the market.

S & P's analysis of 229 major copper mines discovered between 1990 and 2020 shows that there were only three in the past three years.

Although Latin America remains the region with the largest number of major discoveries in the past decade, the average annual increase of 26.3 million tons of copper resources is significantly lower than that of other 10 years since 1990. The S & P 2020 analysis report pointed out that the discovery in the last three years was only higher than that in the past period, and the discovery of 4.6 million tons of these three deposits was significantly lower than the total amount of copper found in most years, and also significantly lower than the average annual copper discovery of 11.5 billion pounds over the past 20 years.

The S & P Exploration Strategy study found that although the resources of large copper mines have increased by 46 million tons since 2020, most of them come from old copper mines discovered in the 1990s. the increase of 26.7 million tons of copper from the previous year came directly from mining companies' exploration of known deposits and existing mines, with less than 6 million tons of copper coming from new discoveries and only 3.9 million tons in recent years.

"while this attests to the quality discovered in 1990, the lack of new copper discoveries in recent years is worrying," commodity analyst Luke Knicks (Luke Nickels) said at an online conference on Market conditions: mining in the first quarter of 2021.

Latin America, which accounts for 40% of the world's copper production, is the main destination for copper exploration, attracting a global budget for copper exploration in the past 20 years. As a result, more than half of the world's major copper discoveries since 1990 have been made in Chile and Peru.

Since 1990, Chile and Peru alone have accounted for 82 per cent of Latin America's 604.6 million tons of copper resources and 44 per cent of the world's newly discovered copper resources.

Although Latin America has had the largest number of copper discoveries in the world in the past decade, the discovery of 26.3 million tons of copper is much lower than in the other 10 years since 1990. In contrast, Africa and Europe have seen significant growth over the past decade, accounting for half of the copper resources discovered since 2011.

S & P found that this was mainly due to the 18.9 million tons of Kakoula (Kakula) deposit discovered by Ivanhoe Mining in the Democratic Republic of the Congo and the 23.3 million tons of Timok (Timok) copper mine discovered by Freeport-McMoran in Serbia.

Because new major discoveries are so poor, S & P believes that the project chain is risky in the medium term.

Even if projects that are unlikely to advance can be put into production, demand will greatly exceed mine production in 2028, and there will be a shortage of refined copper supply in 2021.

S & P noted that of the 229 major findings it studied, 146 were not in production, of which 114 had not yet completed feasibility studies. Only 11 copper mines have completed their construction plans and started development.

"these copper mines not only fail to meet the growth in demand, but also cannot offset the reduction in existing mines. In the next few years, the copper industry urgently needs investment and time to ensure that the project chain can eliminate this medium-term supply pressure, "said the Knicks.