Copper has been unfairly maligned by being lumped in with iron ore as the mining boom quickly evaporated, in what has been characterised too simply as a global resources rout, OZ Minerals chief executive Andrew Cole says.
Copper was a commodity of the future, which benefited from rising demand in electronics, electric cars, battery storage and industrial machinery, whereas iron ore was almost entirely dependent on Chinese demand, Mr Cole said.
“China drives iron ore and the correlation is almost one to one,” he said. But the sheer diversity of different uses for copper and the number of countries around the globe seeking it to drive hi-tech advances wasn’t being factored in by investors, he said.
“The more electric cars that are made, the higher the demand for copper.” Copper’s strong underlying fundamentals weren’t being reflected in the share prices of copper miners like the $1 billion, Adelaide-based OZ, he said.
In Australian dollar terms, the copper price had largely been flat over the past five years and hadn’t been belted nearly as much as iron ore, which had fallen by more than half over the past five years to be about $US55 a tonne, he said on Friday.
Demand expected to rise
The number of Tesla electric vehicles on the road in the Netherlands, where he visited last week, surprised him. Copper is an important commodity in the production of storage batteries and in mobile phones and electronic devices and demand is expected to rise as the digital age accelerates.
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