Copper Kings Look Past China Wobbles to Looming Scarcity – by Matthew Craze and Agnieszka de Sousa (Bloomberg News – April 14, 2015)

As forecasters debate copper’s next price move, the world’s biggest producers say they can extend a decade of profits as mines struggle to keep up with demand.

Even with Chinese growth slowing, aging mines will fail to keep pace with electrical equipment demand in developing countries, according to Jean-Sebastien Jacques, head of Rio Tinto Group’s copper business. He joined executives from Codelco, Freeport McMoRan Inc., Antofagasta Plc and Teck Resources Ltd. in Santiago this week for the industry’s annual get-together.

“I see a substantial supply gap opening up by the end of this decade,” Jacques said. “Now is the time to keep investing.”

Copper lost 11 percent in the past year and traded at three-week lows Wednesday after data showed China’s economy grew at the slowest pace in six years. The metal used in wiring and plumbing will avoid following oil and iron ore into a more abrupt slump as an anticipated surplus is erased by mine setbacks, mining executives including Antofagasta Chief Executive Officer Diego Hernandez and Teck CEO Don Lindsay told the World Copper Conference in Santiago.

Disruptions to mines have included floods in Chile’s Atacama Desert and a mechanical fault at BHP Billiton Ltd.’s Olympic Dam mine in Australia.

Output at Codelco, the world’s largest copper producer, will fall over the next four years as a $25 billion investment program won’t be quick enough to replace depleting operations, CEO Nelson Pizarro said.

Analyst Divergence

Chile’s state-owned producer will keep digging ore at its century-old Chuquicamata open-pit because an underground project beneath the 1-kilometer chasm won’t be ready on time to make up for the expected drop in output, he said.

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