Dr Copper in demand

18 November 2022 10:06

The raised acquisition price of copper and nickel miner OZ Minerals by BHP to $9.6 billion has demonstrated that price outlooks on the red metal remain bold.

Commodity trader Trafigura have recently warned on global stocks falling to record lows, while mining giant Freeport-McMoran have joined the chorus of shortage warnings, stating current prices are not reflecting the physical market.

Used widely across a variety of industries, 20 million tonnes of copper are churned through every year, a figure predicted to double by 2050 and cause a dramatic shortfall which could short circuit global electrification and the drive towards net-zero.

Of the ten most valuable mines in the world, eight have copper as the primary output — and the remaining two produce it as a byproduct.

And this is with Dr Copper, the most versatile of metals, trading at around US$3.7 per pound, considerably down after exceeding the US$5/lb point to reach an all-time high earlier this year.

Goldman Sachs declared in May that copper was fast becoming the most mispriced commodity.

“It is the most cost-effective conductive material and sits at the heart of capturing, storing and transporting new energy sources,” the investment giant said in research paper Copper is the new Oil.

Goldman Sachs said mispricing was centred around rapidly tightening inventories, set to be exacerbated by a lack of outside attention.

It has not evaded the attention of explorers in Australia, and here are the juniors looking to make that next big discovery.

QMines (ASX: QML)

After the last upgrade swelled its resource by 38 per cent, QMines have its third and fourth updates on the way from Mt Chalmers, while results from the Queensland flagship continue to deliver, with several broad intersections showing exceptional grades.

Kavango Resources (LSE: KAV)

The London-based explorer have already launched its 37,600-metre maiden campaign in the Kalahari Copper Belt after thorough exploration built up 14 priority targets, making it a third project drilled in the calendar year after striking success at both the Kalahari Suture Zone and Ditau projects.

Coda Minerals (ASX: COD)

Located in the same Olympic Dam copper province host to both BHP and OZ minerals, Coda have an Elizabeth Creek copper-cobalt scoping study on track for delivery in the fourth quarter, while a full set of results from the 2800 metre campaign over Cameron River, focused on hydrothermal copper-gold deposits, are all set to come in before year’s end.

Castillo Copper (ASX: CCZ)

While it moves on the expansive rare earth potential of Broken Hill, Castillo is developing its namesake resource in significant quantities, with resources at its Broken Hill, Big One and the Cangai Copper Mine projects exceeding a combined 170 thousand tonnes.

DMC Mining (ASX: DMM)

With a copper project at Gibb River and nickel territory across both Ravensthorpe and Fraser Range, DMC have results coming in soon from across its trio, standing poised for a steady stream of future-facing news flow.


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