Copper faces million ton demand deficit in three years
Hudbay Minerals Inc.'s financial chief says the world needs more mines to meet demand for copper and other battery metals as it shifts to less polluting energy sources - even as these initiatives Seen as unattractive to the environment.
Hudbay Minerals Inc.'s financial chief says the world needs more mines to meet demand for copper and other battery metals as it shifts to less polluting energy sources - even as these initiatives Seen as unattractive to the environment.
Steve Douglas, chief financial officer of Hade Bay, told the Bloomberg Canadian Fixed Income Conference on Wednesday that any credible forecast suggests that copper will face a $5 million to $7 million loss over the next three or four years. Million tons of structural deficit. However, without copper, no energy conversion would be possible, he said.
"At least the table is being drawn up for those metals that will help decarbonize the world," Douglas said. "You're going to have to stimulate or allow the creation of a lot of extractive industries that will get a scarlet letter on the environment - you won't be able to decarbonize the world without it."
The ability to build mines in the world of the extractive resources industry is becoming increasingly challenging as investors place increasing emphasis on the environmental credentials of metals producers, while social issues, including dealing with local communities, are also in the spotlight . This has added to industry challenges, including supply disruptions and rising raw material costs.
"We definitely saw this in some of the commodities that rose and peaked earlier this year, such as lumber, Steel and iron ore, those commodities started to fall." "Certainly that would suggest that the inflation that we're seeing is driven by supply chains, driven by disruptions."
Rising costs are hurting Toronto-based Iamgold's efforts to build a mine in northern Ontario, Canada.
"We started construction in July 2020 and we've definitely seen some of the cost pressures that we just talked about in terms of copper, steel and especially labor," she said, noting that the impact of COVID-19 on productivity has led to labor Costs rise. "We're certainly seeing this in the energy space as well, not just in Canada but in our operations in South America and Africa."
Shipping has also been an issue, something Hudbe experienced firsthand.
"We've had a few occasions where we've had to push employees to fulfill their contracts because global shipping costs have just shot up," Hudbay's Douglas said, adding that he's heard of triple and quadruple increases in global shipping. Shipping delays have even affected Hudbay's refurbishment of its Snow Lake, Manitoba, plant.
"Procrastination costs money," he said. "These delays will certainly put your job in jeopardy and add additional costs."
