|Subject:||[TowerTalk] re Rising copper prices lead to rising cable prices...|
|From:||"Rob Atkinson, K5UJ" <email@example.com>|
|Date:||Wed, 10 May 2006 17:25:35 +0000|
the following is a report I posted to a broadcast list in March. Can't
remember if I sent it to tower talk also, but in case I did not, here it
Synopsis taken from today's [March 16, 2006] wall st. journal:
World's growing appetite for copper melds with supply concerns to keep prices above $2/ pound. World's appetite for copper is growing quickly but mining companies don't have new resources to develop...
There's worry for everyone from mining companies to microwave oven makers...new lack of mother lodes to tap. Around 10 years ago Chile emerged as the Saudi Arabia of copper. The world was flooded with copper and prices dropped to less than $0.70/pound. Today, demand from China and elsewhere has kept copper futures prices above $2 / pound even after a recent pullback. Chilean production dropped 2% last year and new mines aren't being discovered quickly enough to make up the shortfall...the world now has unusually low levels of cu and profit margins are squeezed for such cu consumer companies as Belden CDT Inc., one of the largest U.S. makers of electronic cables. Belden recently reported 4th qtr. net income fell 43% as it struggled with rising cu costs. the shortage of new mining projects also extends to zinc and aluminum.
most of the untapped copper are in regions that have unstable governments or are hard to reach such as central Africa and Mongolia. consumption of refined cu is growing 3.5%/year driven by demand in China, other parts of Asia and Europe. In the past, Chilean production plugged the shortage gap with production there jumping to 5.5 metric tons/year from 1.5 MT in 1990, with Chile now producing 36% of the world's supply. The world's 2nd largest cu mine is in Papua Indonesia producing 600K MT. There are 2 big untapped prospects on the horizon: Phelps Dodge is developing a mine in the Democratic Republic of the Congo. A copper and gold deposit in Mongolia's Gobi region is being developed by Ivanhoe Mines Ltd., a venture founded by billionaire mining entrepreneur Robert Friedland. If these projects reach fruition, production will be at least two years off.
rob / k5uj
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