An engineer at Cisco Systems Inc. once told Rio Tinto Group director Megan Clark that electrons travel faster through copper than the air. That observation helps explain why she’s bullish on the red metal.
“It’s not going to be substituted any time soon — it’s still one of our best materials,” Clark, also a former chief executive officer of Australia’s Commonwealth Scientific and Industrial Research Organization, said Wednesday at the Bloomberg Summit in Sydney. “I like copper from every which way I look at it over the next 10 years.’’
While copper prices have tumbled about 27 percent this year, declining grades at aging mines, restrictions on access to water and a lack of new projects means the metal is poised to slide into a deficit as soon as 2016, according to researcher CRU.
Prices are likely to begin a “measured” recovery in early 2017, Chile’s Mining Minister Aurora Williams said last month.
There’s been a lack of investment in new copper projects as commodities producers have cut spending amid the tumble in prices of metals to energy. Glencore Plc, the world’s third-largest copper miner, said this month it will cut more production at its mines through 2017.
“The market is too short-term focused,” Mike Elliott, who’s advised mining companies for more than 30 years and retired last month as global mining and metals sector leader at Ernst & Young LLP, said at the summit.
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