It Is Time To Hug The Copper Miners
Without mining, nothing gets built or works. This is a reality that consumers, politicians and investors are unaware of, or don’t care about. Due to underinvestment in the pipelines for many critical metals is setting the stage for supply shocks.
Take copper for example, it is the most critical of all minerals. In an electric world, it is crucial. Yet, due to long term underinvestment in exploration that results in important discoveries, new copper mine development and dependance on very old copper mines, the supply chain is broken. From top to bottom. It took decades to create the problem and a similar period of time to fix it.
The supply chain starts at exploration, important discoveries have been in decline for decades. Which results in not nearly enough new mines in development. Major copper miners have been depending on old mines for a long time and they are nearing the end of their lives. No matter where you look on the supply chain, it is broken, almost beyond repair which will result in supply deficits.
Copper is needed in all electrical devices, and the supply chain was strained prior to some recent innovations that are putting severe stress on the supply and power grids.
Mining crypto currencies, AI and electric vehicles are some recent things that could cause major issues. They are putting massive stress on power grids that are ancient and not prepared.
We hear a lot about these new users of copper, but not so much about where all the copper will come from to make them and keep them running. Before they came along, the world needed much more copper for all the other electric products the modern world uses. With them, it will undoubtedly cause copper supply deficits due to the broken copper supply chain.
Consumers want the benefits of what is made with copper, but they have little acknowledgment of where the crucial copper comes from. It doesn’t come from a magical copper genie, it comes from mining.
Time to hug copper exploration companies, new copper mine developers and copper miners.
The combination of the demands for copper and broken supply chain is setting the stage for copper to go much higher. I would argue multiples of its current price.
All the best,
Allan Barry Laboucan
