There’s going to be a deficit of copper globally by 2030 of about eight million tonnes, according to a recent study.
One CEO told me recently there’s currently only about five days of copper supply on the global market.
This is as the world inexorably transitions to renewable energy and electric vehicles.
Copper is one of the most-needed critical metals amid this shift as it conducts heat and electricity very well and has so many applications for use in electrical equipment, wiring, roofing and plumbing, industrial machinery, and electric vehicles.
Which copper producing companies will be the winners for the rest of the decade?
Here’s a list of five to consider and the catalysts that may drive their stocks, with four of them higher the last five years by between 50 per cent and 210 per cent, and the one laggard with 47 per cent upside potential. (See chart below)
We would have some copper exposure due to a tight physical market and positive medium term fundamentals.
- We continue to like Teck Resources as they can take advantage of elevated met coal prices, and double copper production as their QB2 mine ramps up.
- First Quantum and Ivanhoe provide the best leverage to copper.
- Capstone is creating value through expanding their Mantos Blancos and Mantoverde mines.
Hudbay Minerals, Target Price $10, Implied Return: 47 per cent:
Q4/2022 higher copper grades expected at Pampacancha;
Drilling at Caballito and Maria Reyna targets near Constancia in 2023;
Copper World pre-feasibility study in first half of 2023 (H1/2023) and receive state permits by mid-2023;
Update on tailings re-processing in Manitoba in 2023.
Teck Resources, Target Price $60, Implied Return 14 per cent:
Re-start of coal operations late November;
First copper production at QB2 in December/January;
QB2 mill expansion feasibility study in 2023;
San Nicolas Feasibility Study early 2024 with project sanction thereafter, subject to permitting.
First Quantum, Target Price $33, Implied Return: 6 per cent:
A final tax agreement in Panama could come anytime (initial terms were announced in January, 2022);
Ramp up to 100 million tonnes per annum (Mtpa) at Cobre Panama during 2023;
First ore from the Enterprise nickel project in H1/2023 of 30,000 tpa/year Nickel (30ktpa).
Kansanshi larger mining fleet delivered H2/2023 and first production from the S3 expansion in 2025 (taking production to 250kt/year vs. 2022 guidance of 140-150kt);
Potential sanction decision for Las Cruces underground of 45kt/year copper equivalent (CuEq) and/or Taca Taca (275kt/year Cu) in 2024 at the earliest.
Ivanhoe Mines: Updated pre-feasibility study, including the Phase 3 expansion and direct-to-blister smelter, expected in late 2022;
Drilling from the Western Forelands project anytime;
First production from Platreef Phase 1 in Q3/2024; First production at Kipushi Q4/2024.
Capstone Copper, Target Price $6, Implied Return: 59 per cent:
Site tour of Chilean assets November 14-17th with high level details on Mantoverde/Santo Domingo development options, synergies, and cobalt recovery expected to be announced before the site tour;
Pinto Vally expansion study (PV4) in H1/2023 which could expand the processing plant and extend the mine life;
Mantoverde development project completed Q4/2023 with a feasibility study for Phase 2 to be completed H2/2023;
Mantos Blancos phase 2 feasibility study H1/2023;
Resolution to Chilean tax changes could come in 2023.