High copper demand, scarce resources puts miners in good position

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With copper becoming more scarce throughout the world and Asian demand expected to continue to swell, many copper miners are expecting prices to go up, in turn reaping higher profits from their mining operations.

According to ABC Rural, many Australian miners are counting on demand from China to fuel further copper mining growth. With a new mine recently opening in Western Australia, Miners and Metals Group mine manager Pierre Malan says that future growth in China will offset recent copper price slides.

Bloomberg reports that global demand for copper is expected to continue into 2012, with an estimated increase of 2.7 percent. As mining companies fail to keep up with consumption of the widely used metal and developing economies continue to grow, demand in emerging nations could expand 6.1 percent.

According to one mining CEO, the scarcity of the metal will likely drive miners to take advantage of higher prices and expand existing mines.

Richard Adkerson, CEO of Freeport McMoRan Copper & Gold Inc., recently spoke at the Dahlman Rose Global Mining, Metals and Materials conference in New York, where he stated that copper had become increasingly rare in the last 10 years, keeping copper mining companies from boosting supply as the red metal’s price continued to climb.

Despite lingering Europe problems, the CEO stated that copper prices have continued to trade high above the cost of production, and the company is also looking to China, still the world’s number one consumer of copper, to drive demand.

Adkerson added that although copper has lost some of its market share to plastics in the plumbing sector and aluminum in air conditioning units, copper contains inimitable properties that will help it remain the number one metal for electrical and electronic uses.

“Motors and electronics are everywhere we look,” Adkerson said. “Copper is tough to replace for its basic uses.”

Now, the company is spending $2 billion on new exploration to feed the high demand for copper, almost all of which the company says is brown field exploration.  

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