Copper Shortage Is Irreparable Even after Biggest Mergers and Acquisitions, Here’s Why

Published: May 24, 2023 15:40

Save

Earlier this year, Rio Tinto executives and Mongolian officials announced the commissioning of the Oyu Tolgoi underground copper mine, Mining.com reported, citing Bloomberg News.

Doug Kirwin, a geologist who worked on the site early, believes that "we will not be able to meet the copper demand necessary for the energy transition and net zero emissions in the next 10 years.

This is impossible”, “not enough copper deposits have been discovered or developed”.

There are not as many new mines, fewer large copper mines, and the result is a shortage.

BloombergNEF predicts that demand for copper will grow by 53% by 2040, but mine supply will only increase by 16%.

A looming shortage of the green metal incentivised Glencore to buy Teck Resources, long a high-profile copper target. Newmont, the largest gold miner, bought Australian mining giant Newcrest Mining Ltd, which could increase gold reserves and also increase copper production capacity.

BHP has just completed the acquisition of Oz Minerals, which is BHP's largest acquisition in 10 years.

Although these mergers and acquisitions are successful, it will not change the balance of global copper supply and demand.

More popular news:

Commodity Price Bubble Finally Burst, but Metals Demand Will Surge

Glencore to Massively Expand Copper Capacity

SMM Daily Comments (Jun 2): All Metals Closed Higher with SHFE Nickel Leading Gains, Coke Surged

SMM Daily Comments (Jun 1): Base Metals Mostly Rose with SHFE Aluminium Surging, Ferrous Metals Rose across the board, Iron Ore Skyrocketed

SMM Daily Comments (Jun 5): Base Metals Mostly Fell, Ferrous Metals Bucked the Trend to Surge, Oil Gained Further on Saudi Arabia Output Cuts in July

SMM Indonesia Nickel and Cobalt Industry Chain Conference: Global Nickel & Cobalt Supply and Demand Prospect, Impact from NEV Development

Commerzbank Lowers Price Forecast for Copper, Aluminium, Zinc and Nickel for 2023 and 2024

Rumours Say Glencore Will Raise Takeover Bid for Teck Resources, but Another Big Obstacle Lies Ahead

Market forecast Market review

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 hour ago

Shanghai Spot Copper Price Spread Narrowed as Consumption-Driven Characteristics Emerged [SMM Shanghai Spot Copper]

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, the Shanghai spot copper market is expected to remain under pressure. After copper prices jumped, downstream procurement sentiment pulled back, indicating limited acceptance of current price levels. From the market structure perspective, suppliers showed strong willingness to sell, with some brands continuing to offload cargo, putting pressure on discounts. Downstream buyers mostly maintained a wait-and-see stance, with procurement mainly driven by rigid demand and buying on dips. It is worth noting that the price spread between high-quality copper and standard-quality copper narrowed somewhat from the previous period, indicating that the market trading structure has become more rational, with actual consumption demand becoming the dominant force at the current stage. Overall, amid the tug-of-war between suppliers actively selling and downstream buyers purchasing cautiously, spot prices against the 2604 contract are expected to maintain the current discount level tomorrow.

1 hour ago

Buyer Procurement Demand Surged in a Concentrated Manner, Sending Yangshan Copper Premiums Sharply Higher [SMM Yangshan Spot Copper]

1 hour ago

Inventory Fell for the Seventh Consecutive Session, Suppliers Actively Held Prices Firm, and Spot Premiums Rose [SMM South China Spot Copper]

1 hour ago