While the outlook for copper demand is positive, supply is constrained by declining resource quality and long lead times, Antofagasta (OTC:ANFGF) Chairman Jean-Paul Luksic said, according to The Wall Street Journal.
Without additional and yet-to-be-committed investment in mine production, the effect of grade decline and depletions will lead to a growing copper supply gap, Luksic said.
The rise in inflation and the Ukraine war add significant uncertainty to the copper market, but Antofagasta (OTC:ANFGF) expects demand for copper will remain strong with a significant share of the growth coming from regions other than China.
“Having made ambitious commitments to the green economy in recent years, governments and companies are set to make sizeable investments to meet them, as this has been accelerated by the current energy crisis,” Luksic said, according to WSJ.
The Antofagasta (OTC:ANFGF) chairman also expects the new mining royalty bill in Chile will result in increased taxation for the mining industry, but should ensure that the industry remains competitive and attractive for new investment and continuing growth.
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Comex copper (HG1:COM) rebounded on Wednesday, +2.3% to as high as $4.25/lb midday, helped by a slight pullback in the dollar; with tightening lockdowns in China sparking worries about demand, copper prices sank on Monday to their lowest in nearly eight months.