China's urban regeneration to be new driver for global copper demand: Oz Minerals
Melbourne (Platts)--26Nov2012/444 am EST/944 GMT
The urban regeneration of China will be the "new" driver of global
copper demand, OZ Minerals managing director Terry Burgess said in Adelaide
Thursday evening at the 38th annual Essington Lewis Memorial Lecture -? one
of the most prestigious lectures on the South Australian resources industry
"While urbanization is still occurring in China at a rapid rate, urban
regeneration -- where people are moving from the older style urban dwellings
in the 'old city' areas to more modern high-rise living spaces in the 'new
towns' -- is now a bigger driver of copper demand," Burgess said.
He expects this demand to continue for some time, which will be
beneficial for Australia and in particular for South Australia's Gawler Craton
-- considered to be one of the most highly prospective regions for copper in
Article continues below...
|Sign up to Metals Daily|
Platts Metals Daily offers prices, news and analysis for the aluminum, copper and molybdenum value chains. It contains hundreds of metals prices across base, minor, light and precious metals assessed by editors globally. This detailed report will help you monitor global events and quickly spot opportunities or potential pitfalls as well as bring you aluminum and copper price and news coverage. Daily prices and news for molybdenum are also covered to deliver critical insights.
Demand for copper will come in the next wave of development in China with
copper used for electrical infrastructure, wiring and other elements of
But Burgess said the main use will come from people buying air
conditioners, white goods and other appliances.
"Appliance orders have been improving in recent months," Burgess said,
with Chinese air conditioning production this October, increasing by 30%
compared to the same period last year.
On the copper supply side, Burgess sees the industry struggling to keep
up with demand due to various reasons including delayed capacity coming
online, weather disruptions and industrial unrest.
Some mature mines, such as Grasberg, Ernest Henry and Chuquicamata, will
continue to report production reductions due to declining grades. Four out of
the top six producers in the world reported declines in production of around
8-18% in the first half 2012, he said. As such, the global copper industry is
expected to have a supply shortfall of around 800,000 mt in 2012, he added.
The only new supply expected to be commissioned in the short term is
coming from riskier operating regions, like Oyu Tolgoi in Mongolia and Las
Bambas in Peru.
The outlook for copper markets though remains positive, but cost
pressures will still be a challenge for Australian production in the near
term, Burgess said.
OZ Minerals owns and operates the Prominent Hill copper-gold mine located
180 km from Coober Pedy. The mine produces 100,000 mt/year of copper
concentrate, which is sold primarily into the Chinese and Indian markets.
The South Australian miner is also developing the Carrapateena
copper-gold project near Port Augusta in South Australia.
--Marnie Hobson, firstname.lastname@example.org
--Edited by Haripriya Banerjee, email@example.com