Vancouver-based mining entrepreneur Ross Beaty, the creator of a number of copper exploration companies, Thursday said he believes that the mining sector may be approaching a “Hubbert’s Peak” for copper.
In a discussion to the Northwest Mining Association convention in Spokane, Washington, Beaty– the Chairman of Pan American Silver– anticipated that the bottom line might indicate that low-grade copper deposits will need to be developed globally to keep up with soaring demand for the metal. However, he added, copper prices would need to go even greater to make the advancement of these deposits practical.
” You have a stock squeeze today,” Beaty explained, which might surge copper costs to over $2 per pound. He noted that no shock absorber currently exists in copper markets. On the other hand, Beaty stated that only 56 new copper discoveries have actually been made during the past 3 decades.
Beaty explained such supply-side market characteristics as smelter and refinery bottlenecks, which are slowing supply and keeping rates high. He described that 21 of the 28 biggest copper mines worldwide are not amenable to growth, while numerous big copper mines will be exhausted in between 2010 and 2015.
The absence of water in Chile’s areas I and II will slow expansion and advancement, Beaty asserted. Meanwhile, Chilean mine production will peak in 2008 then decline, he anticipated.
Beaty described that environmental, social and political issues will inhibit mine development in the United States, Indonesia, the DRC, and Russia. On the other hand, new discoveries in Mongolia, Ecuador and the Congo may be tough to develop, he included.
Beaty declared that a profound change has actually taken place in the usage of all metals. In China, for example, he thinks forecasted that strong oil costs will fuel huge hydroelectric, nuclear and coal power facilities financial investments, and offer rewards to utilize hybrid cars, which utilize 4 times more copper.
Resources of precious metals – how much is left?
Among the current patterns described by Beaty: “Worldwide, financial copper resources are being diminished with the comparable production of 3 first-rate copper mines being consumed every year; meanwhile, copper need is increasing by more than 575,000 tons each year and speeding up.”
To make money from these patterns, Beaty prompted investors to buy stock in mining business. He anticipated that while the price of physical gold and silver will probably increase 10%, mining stocks have the potential to understand a 20% increase.
Beaty, who is the chairman of Pan American Silver and Lumina Copper, is especially bullish about another among his business, Northern Peru Copper (NOC: TSX), which was spun off previously this year from Lumina.
Previously an expedition geologist, Beaty explained Northern Peru’s Galeno advanced copper-gold job as “most exciting and fascinating in terms of expedition.” Galeno is located 15 kilometers from Newmont’s mega-gold producer, Yanacocha.
In a report published last June, research experts Matthew O’Keefe and Phillip Williams of Westwind Partners in Toronto suggested Galeno would “make a logical acquisition” for surrounding Newmont. The analysts likewise composed that Galeno could progress into a great stand-alone resource “with great potential for advancement by any operator in Peru.” Because of these reasons, Northern Peru Copper is intending to sell Galeno next year.