Tight supply to push copper over $9,000 a ton this year

By REUTERS

Published: Mar 17, 2012 23:53 Updated: Mar 17, 2012 23:53

LONDON: The copper industry is likely to experience years of supply uncertainty as growing resource nationalism threatens production, potentially pushing prices to above $9,000 this year, Chile's Centre for Copper and Mining Studies CESCO said.

CESCO's Executive Director Juan Carlos Guajardo told Reuters he expected a 200,000 ton deficit this year as supply falls short of demand particularly from top consumer China, adding the mining industry needed coordinated action to ensure future supplies.

Foreign mining firms face growing opposition from politicians, workers unions and indigenous rights groups in host countries seeking a greater share from lucrative mining activity, pushing up mining costs for international companies.

"If the copper market is to be balanced, the industry needs to do things differently and face this challenge," Guajardo said.

"And only this way do I see more chances of getting the projects on time, or else the structural imbalance will continue for many years," he said.

Earlier this month, Indonesia said it would limit foreign ownership of mines to take more profit from its vast mineral resources. Countries such as South Africa, Australia and Canada have also experienced growing resource nationalism.

The trend has forced mining companies to venture into more politically risky territory, including restive parts of Africa. Countries previously seen as too risky, such as Burkina Faso, Congo and Mauritania, are now firmly on their radar.

Full article: http://arabnews.com/economy/article588455.ece