Copper supply worries hit globe

BY PATRICK BARTA
THE WALL STREET JOURNAL
Posted on Sunday, March 19, 2006

<snip> The lack of obvious new mining megaprojects is a key reason why many analysts believe copper prices will remain well above $ 1 a pound for at least several years. The shortage of new mine projects isn’t confined to copper. Concerns extend to zinc, aluminum and other resources important to the world economy. Commodity prices have soared during the past several years amid a surge in demand from China. Some analysts are comparing China’s boom to the industrial revolution that transformed the U. S. into a global economic power in the late 1800 s, yielding a multidecade rise in commodity prices. In the case of copper, futures prices have retreated after soaring past $ 2. 30 a pound on the New York Mercantile Exchange in February. Many analysts believe prices were pushed too high during the past year by speculators and a series of mine accidents and worker strikes that since have been resolved. These included strife at Freeport-McMoRan Copper & Gold Inc. ’s massive Grasberg mine in Indonesia, where illegal miners set up wood-and-stone barricades to protest the company’s efforts to stop them from retrieving gold from waste rock. But last week’s New York Mercantile Exchange prices hovering around $ 2. 25 a pound were still sharply higher than those in 2001, when copper fell below 70 cents. <snip>

Chilean production slipped slightly last year, however. While Corporacion Nacional del Cobre de Chile, or Codelco, the world’s largest copper miner, plans to expand mines, many analysts believe the country is approaching its peak as old mines are depleted and mineral grades decline.

At the Morgan Stanley conference, Richard Adkerson, chief executive of New Orleans-based Freeport-McMoRan, said production at the Grasberg deposit in Papua, Indonesia, would drop roughly 10 percent this year to nearly 600, 000 metric tons, and will remain close to that level for several years. The world’s second-largest copper mine, it will continue to produce a large amount of copper for many years, and the company has added to reserves through continued exploration in the area. The company isn’t planning to develop any other major mines.

2 MAJOR PROSPECTS. There are at least two big untapped copper deposits on the horizon. One is a copper and gold deposit in Mongolia’s remote Gobi region that is being developed by Ivanhoe Mines Ltd., a venture founded by billionaire mining entrepreneur Robert Friedland. The other is Tenke Fungurume, a long-delayed project in the Democratic Republic of Congo that is controlled by Phelps Dodge. Ivanhoe aims to begin production in 2008, ramping up to a peak capacity that could make its operation one of the biggest in the world. Some experts believe that if the mine is fully developed, it would produce enough minerals to effectively double Mongolia’s total gross domestic product. Ivanhoe hasn’t yet obtained final financing, and Mongolian officials haven’t finalized mining and tax laws that would govern the project. In the Congo, Phelps Dodge hopes to begin some mine construction this year or early next. It’s not certain when full-scale production will begin in the country, which has long suffered from political instability. In Chile, there is concern that prospects there are limited in part because of a shortage of water. The copper-mining process requires large amounts of water to help separate copper from the ore, and some of Chile’s biggest mines are located in the forbidding Atacama Desert far north of Santiago.

http://www.nwanews.com/adg/Business/149207/

World Scrambles to Feed China's Appetite for Metal

China's voracious appetite for metals is convulsing the world. It has led to economic booms in some nations and crime waves in others by so-called urban miners who steal metals from houses and public buildings. China's runaway economy needs the metals to build railroads, office towers, cars and appliances.

The Middle Kingdom is now the world's biggest consumer of copper, lead, zinc, iron ore, steel and aluminum.

China's hunger has boosted mineral-rich nations, from copper-laden Chile to Australia, which has vast iron deposits. Prices of new and used lead, copper, nickel and other metals have tripled or more in the last few years, triggering a worldwide scramble for the commodities.

Chinese state-owned mining companies are prowling the planet for fresh supplies, while armies of people such as Ying and Lin spend their days hunting for castaway metals from typewriter letterheads to 30-foot-long aluminum missile casings.

http://www.latimes.com/news/printedition/front/la-fi-chinametals19mar19,1,5613478.story?coll=la-headlines-frontpage

SE AZ - Dragoon to be specific

At this rate, we may actually have start recycling what we've already dug up!

The miner 2049-ers, staking claims in landfills everywhere!

Landfills might be the one good thing we leave our descendants. All those metals in one easy pit...

.. out in all directions, dirty disposal diapers, rusty spray cans full of pesticides under pressure, diabetics' used syringes, ...

America's future trashpickers will certainly find our landfills to be just as just much like paradise as the trashpickers in the less-developed world find landfills today ...

...bulldozing it into a smelting plant. (ethanol-fueled bulldozer, of course). I certainly wouldn't fancy wading out there with a basket.

mines along all of our highways. I have a feeling our cities could one day be used as "mines" of a sort too.

March 21 (Bloomberg) -- Zinc and copper rose to records in London as a decline in inventories signaled strengthening demand from China, the largest consumer of both metals.

Zinc stockpiles tracked by the London Metal Exchange fell 2,400 tons, or 0.8 percent, to 302,700 tons today, equal to less than 11 days of global consumption. Inventories have dropped 48 percent in the past year. Copper stockpiles dropped 750 tons, or 0.6 percent, to 130,300 tons, or less than three days of usage.

``All is still down to China's demand and supply constraints,'' said Juan Pablo Orjuela, a London-based analyst at Koch Metals Trading Ltd., a member of the LME. ``There's good physical demand for zinc and users have to turn to LME stockpiles.''

Zinc for delivery in three months rose $30, or 1.2 percent, to $2,500 a metric ton at 1:14 p.m. on the LME after reaching $2,510, the highest ever. Copper gained $65, or 1.3 percent, to %5,170 a ton after reaching a record $5,186.

http://www.bloomberg.com/apps/news?pid=10000080&sid=aunpLGyevxGc&refer=asia