American Pacific Mining Corp CEO Warwick Smith has revealed that copper could outperform gold in 2024 due to a looming supply deficit. Gold has made significant gains in recent months as the ongoing Gaza crisis increased fears of a broader war in the oil-production region and pushed more investors to the precious metal. However, Smith noted during a recent Kitco News interview that supply issues in the copper supply chain could help the metal outperform gold.
Smith said that while gold will remain an important product in American Pacific Mining Corp’s lineup, copper is his “favorite metal for the moment” and will remain so for a while. This is due to the sheer amount of copper that will be needed to support the global transition to clean energy, he explained.
The world is keen on adopting cleaner sources of energy and technologies over the next few decades to cut down on greenhouse gas emissions and arrest climate change. With billions of dollars already invested and billions more poised to be invested during the green revolution, copper producers stand to make a killing during the next couple of years, especially now that the copper supply chain is facing a potentially catastrophic deficit.
Most analysts believed that there would be a surplus of copper through the end of 2023 and well into 2024, but the sudden loss of around 600,000 tons of expected supply plunged the market into a sudden deficit. This loss will undoubtedly cause copper prices to rise, especially as the deficit grows, and companies such as American Pacific Mining Corp are poised to take advantage of the deficit to ramp up copper production and rake in increased profits.
According to Smith, the world will have to triple the amount of copper that has been produced from the beginning of time within the next two decades to achieve carbon neutrality by 2050. Smith predicted a global copper crisis in around 10 years and said that most players see the deficit coming but aren’t willing to acknowledge it.
American Pacific has partnered with Dowa Metals & Mining, which owns Japan’s largest zinc smelter, to develop the Palmer VMS Project. The company is also working with Rio Tinto to develop a Montana-based copper-gold project.
Smith says the company weathered the capital shortage that plagued the mining industry last year by relying on “great partners” to keep its projects going. He expects investor interest in the sector to increase due to increased mergers and acquisitions coupled with higher product prices.
As that investor interest increases, metal exploration companies such as Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) could see more capital inflows from investors looking to benefit from the expected surge in copper prices as supply dwindles.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
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