Julian Kettle is Vice Chairman, Metals & Mining at Wood Mackenzie.
The time is right for the mining industry to invest in new projects. The fundamentals are clear: we forecast supply gaps across a number of key commodities by 2028.
Investors are understandably concerned that the mining industry will repeat the sins of the past. Meanwhile, macro-economic uncertainty is putting the brakes on project development, and the industry must contend with a widening range of above-ground risks.
But our view is that strong fundamentals mean that investors willing to step up will be rewarded.
Where are the most critical supply gaps?
China is a driving force in global commodity markets. Despite its best efforts, the country is geologically short on several important metals: copper, nickel, zinc, iron ore and aluminium.
In the long term, rising demand, declining grades and a lack of development will exacerbate the supply gap. Copper is the most urgent: if no new capital is committed, we forecast a 5.7 Mt supply gap by 2028. Greenfield incentive prices are either at or approaching the right level for copper, zinc and gold, making these metals ripe for investment in 2019 and 2020.
For the rest of this column: https://www.woodmac.com/news/opinion/mining-industry-needs-investment-or-metal-shortages-are-inevitable/