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New bull chart for $30,000 copper price: porphyries nearly mined out

May 15, 2021

New bull chart for $30,000 copper price: porphyries nearly mined out

New bull case for $30,000 copper price: porphyries nearly mined out
Bad moon rising over porphyry deposits. Radomiro Tomic, Chile. Image from Codelco.

Predictions for copper at double or triple today’s level is a fairly recent phenomenon – and bears still outnumber bulls as to what’s next for the bellwether metal.

Wall Street natural resource investment house Goehring & Rozencwajg Associates confirmed their place in the superbull camp this week, predicting a copper price north of $30,000:

“The previous copper bull market took place between 2001 and 2011 and saw prices rise seven-fold: from $0.60 to $4.62 per pound. The fundamentals today are even more bullish.

“We would not be surprised to see copper prices again advance a minimum of seven-fold before this bull market is over.  Using $1.95 as our starting point, we expect copper prices to potentially peak near $15 per pound by the latter part of this decade.”

The rosy demand side for copper has been well documented and Goehring & Rozencwajg focuses on supply, specifically depletion in their latest commentary.

Depletion, surprisingly, is not discussed that often in the industry and according to the authors is little understood, despite its fundamental importance for long-term supply trends.

Low and declining grades, uninspiring green and brownfield discoveries (with a few exceptions) and thin, slow project pipelines have become rules of thumb in the copper mining industry.

To those issues, the report adds copper miners’ habit of high-grading (mining your best quality ore first) and growing your reserves with a simple ploy – lowering cut-off grades when prices rise.

Even with prices well above $10,000 a tonne, these paper reserves cannot keep growing, according to  Goehring & Rozencwajg, specifically at porphyry deposits which produce 80% of the world’s copper.

…click on the above link to read the rest of the article…

A Mining Explosion: The Dirty Little Secret Of The Green Revolution

October 31, 2019

A Mining Explosion: The Dirty Little Secret Of The Green Revolution

Mining Explosion

Leftwing darling Alexandria Ocasio-Cortez’s proposed Green New Deal, despite its flimsy 14 pages total, is nothing if not all-encompassing and vaulting in its ambition. The bill was also crucial to Ocasio-Cortez’s rapid ascent to acronym status and anointing as the queen of green.

Thanks to her How Dare You tour, 16-year old Greta Thunberg is now the undisputed leader of the growing ranks of school-bunking climate crisis warriors all over the world. 

The Greta show arrived in MINING.COM’s hometown of Vancouver last week to take Make-Love-Not-CO2 youths (and second-life hippies) on yet another march and bridge-blockade. The footslogging Greta groupies are beginning to resemble the disastrous 1212 children’s crusade – with higher ground now doing service for holy land.

Much of the response to AOC and Thunberg (who seem to get on like a house on fire if the Guardian is to be believed) on the right has been mocking and dismissive, accusing the pair of swapping hamburgers for pie in the sky.

This is a mistake. 

Red turns green

Some estimates put the green economy in the US at $1.3 trillion in annual revenue already – that’s 7 percent of GDP – with a workforce of 9.5m Americans.  

Within the Green New Deal is a goal of “meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources”.  AOC has no deadline of course, but no doubt Greta would want that for the whole world before she hits drinking age.

A seminal paper by Bernstein’s European mining and metals team led by Paul Gait outlines just how fundamental a restructure of the global industrial economy is necessary to bring this – or even a fraction of this – about. 

And all of it to the great benefit of mining.

 …click on the above link to read the rest of the article…

Is This The Beginning Of An Oil Sands Revival?

January 7, 2018

Is This The Beginning Of An Oil Sands Revival?

pipelines

New life was breathed into the Canadian oil sands with a decision by foreign-owned Harvest Operations Corp to commission its BlackGold project south of Fort McMurray.

The Calgary-based arm of South Korean state-owned Korea National Oil Corp announced on Dec. 21 it will start the 10,000 barrels of oil per day (bopd) steam-assisted gravity drainage (SAGD) operation, construction at which was halted in 2015 due to low oil prices.

In a press release on SEDAR, Harvest said that major work at the site has already started, with the aim of commissioning wells and starting steam injection in Q2 2018. Production is slated for the third quarter.

It cites “the stabilization of crude oil pricing and the improved operational and financial performance of Harvest’s conventional business as factors in its decision to move forward with BlackGold.”

The start-up has been helped through a refinancing of $1.36 billion of maturing debt, plus the raising last month of an additional quarter-million in financing, the company said.

Global News notes the project was built for around $900 million and was “considered mechanically complete” when it was shelved in the spring of 2015 when WTI oil prices were around $50 a barrel, half as much as a year earlier.

WTI on Thursday closed at $59.84, for a percentage gain of 0.34%. Related: 2018: The Year Of The Oil Bulls

The Canadian oil sands have seen an exodus of foreign investment since the oil price collapse of 2014 and US shale plays gathered momentum. The divestments have included Royal Dutch Shell, Marathon Oil, Statoil and ConocoPhillips.

Yesterday AXA SA, the third-largest insurer in the world, said that it will divest about $822 million from the main oil sands producers and associated pipelines, and will stop further investments in these businesses. The move could affect companies such as TransCanada, Enbridge and Kinder Morgan.

But as foreign companies have pulled out money, Canadian firms have made multi-billion-dollar deals to expand their holdings. According to energy consultancy Wood Mackenzie, Canadian ownership of oil sands production now sits at over 80%, reported the Calgary Herald.

Oil-Rich Venezuela Is Out Of Gasoline

December 31, 2017

Oil-Rich Venezuela Is Out Of Gasoline

Venezuela

After lining up for an entire day to get a plane ticket to visit her relatives in the western city of Mérida, Josefina García did not know if she and her octogenarian mother were going to reach their final destination on time for Christmas.

The airport is located 76 kilometers away from the city and when they tried to book a cab in advance to take them to the place where they were going to stay, the taxi company said they could not make bookings because there is a shortage of gas and management did not know if they were going to have enough fuel on the day of Josefina’s arrival.

Once they landed, the 61-year-old and her mother found a cab that had enough gas to take them to a certain part of the city where a cousin would pick them up. In the meantime, another cousin was lining up for gas. He was able to fill his sedan’s tank after waiting for more than six hours.

According to the Organization of the Petroleum Exporting Countries, the highest proven oil reserves in the world, including non-conventional oil deposits, are in Venezuela.

“Gentlemen: There is no more gasoline in Venezuela. In Venezuela, we are out of gas. In Venezuela, there is no gas oil. In Venezuela, there are no lube oils,” said Iván Freites in a televised press conference. Freites is the secretary of the professional and technician division of the United Federation of Venezuelan Petroleum Workers.

In his address, Freites said that poor management led to the stoppage of 80 per cent of the country’s refineries. “Only Amuay and Cardón refineries are operative and that is nothing. They produce 40,000 barrels per day and the national demand is over 200,000 barrels of gas per day,” he said.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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