https://www.miningweekly.com
Building|Copper|Energy|Lifting|Manufacturing|Mining|Projects|Manufacturing
Building|Copper|Energy|Lifting|Manufacturing|Mining|Projects|Manufacturing
building|copper|energy|lifting|manufacturing|mining|projects|manufacturing-industry-term

BlackRock says $12 000/t copper is needed to incentivise new mines

Prices are well below the levels needed to incentivise new greenfield production

Prices are well below the levels needed to incentivise new greenfield production

25th April 2024

By: Bloomberg

  

Font size: - +

Copper needs to reach $12 000 a ton — a 20% jump from this week’s high — to incentivize large-scale investments in new mines, said Olivia Markham, who co-manages the BlackRock World Mining Fund.

The metal’s price hit a two-year high near $10 000, but Markham said further gains are necessary to encourage miners to sign off on projects required to avoid major deficits during the energy transition.

“When I look at the price today, I think it’s well below the pricing levels we need to incentivise new greenfield production,” Markham said in an interview Wednesday. “Structurally, we need more copper units, and currently I don’t see those big blocks of new supply coming through.”

BlackRock has been among the most bullish voices in the copper market for years, and by degrees that sentiment is echoing across the industry as buyers contend with an unprecedented shortage of mined ore. Demand has been alarmingly soft in China this year, but a broad consensus has nevertheless emerged that the worsening squeeze on mine supply may jolt prices.

Markham’s forecast is underpinned by an analysis of the soaring costs miners incurred in building copper projects recently, with an average spend of about $30 000 for each ton of production capacity.

For a mine producing 300 000 tons a year, that would translate to a ballpark price tag of $9-billion. Incentive-pricing analysis indicates that miners would need $12 000/t copper to make a 15% post-tax return on future investments, she said.

Anything below that, and they may be reluctant to go ahead.

Together with signs of improving manufacturing sentiment, the shortage of mined copper that’s emerged this year has led some to ask if now is the beginning of a bull run that could see the metal smash price records.

Copper traded 1.2% higher at $9 818.50 a ton on the London Metal Exchange as of 3:48 p.m. local time Wednesday, lifting the year-to-date gain closer to 15%.

Edited by Bloomberg

Comments

Showroom

Victaulic
Victaulic

Since 1919, Victaulic’s innovative solutions and design services continue to increase construction productivity and reduce risk, ensuring projects...

VISIT SHOWROOM 
Multotec
Multotec

Multotec, recognised industry leaders in metallurgy and process engineering help mining houses across the world process minerals more efficiently,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Resources Watch
Resources Watch
12th June 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.273 0.311s - 108pq - 2rq
1:
1: United States
Subscribe Now
2: United States
2: