Production Challenges, Surging Demand Keep Copper Prices Rising

Copper is a critical metal for many industries, among them electrical, construction, renewable energy, and automotive manufacturing. Its excellent conductivity, corrosion resistance, and recyclability make it indispensable for wiring, motors, electronics, and increasingly, in the infrastructure supporting green technologies such as electric vehicles and solar energy systems. 

This means that demand for the red metal continues to increase, especially as more countries continue to transition to the use of clean and sustainable industrialization. 

Currently, there’s a huge shortage of the metal, with analysts noting that new supply is still not enough to support demand. This comes after protests at the Constancia mine in Peru, an accident at the El Teniente mine and flooding at the Kamoa-Kakula mine significantly disrupted the global supply of the red metal. 

Just recently, a mudslide at the Grasberg Block mine in Indonesia led to the death of seven workers, a huge loss for their loved ones. The Grasberg mine has, in the past, prompted legal action from environmental campaigners citing poor labor conditions and environmental damage. 

Daniel Morgan, a metals and mining analyst at Barrenjoey Capital Partners, expects that there will be a shortage of roughly 900,000 tons of copper on the market. Morgan explains that the market needs about a million tons in new copper production annually to keep up with current demand, a target that has become increasingly difficult to achieve due to persistent supply interruptions. 

As supply shortages continue, the red metal’s prices continue to surge. Just last week, the metal advanced to $10,719 per metric ton, bringing it closer to its record mark of $11,104.50. Copper futures for three-month delivery also hit a 16-month high as markets reacted to the Grasberg mine disaster. 

So, what are firms doing to increase copper supply? 

BHP recently revealed plans to allocate $555 million in funds to increase production of the red metal at its Olympic Dam project. The project houses the biggest copper mine in Australia and shall see a new underground access tunnel being built, allowing access to another section of its resource. 

BHP, which also owns copper assets in America, Peru and Chile, aims to increase its annual production to 2.7 million tons. 

Anglo American, another major miner, recently entered into an agreement to share infrastructure between the Andina mine and Los Bronces to bolster production. Additionally, Rio Tinto and Codelco are working together to create a copper mining district that shares infrastructure and may, in turn, boost production. 

Exploration companies like Torr Metals Inc. (TSX.V: TMET) are also working as best they can to uncover viable new copper deposits in North America to boost future supply. 

NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET 

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