Rio Tinto Copper CEO: Tight Supply Situation Over Next Decade
LONDON -(Dow Jones)- The medium- to long-term outlook for copper is positive with a tight supply situation expected over the next decade, the head Rio Tinto's copper division said Monday.
The "outlook for copper is positive...demand will be driven by China...India will also contribute," Rio Tinto Copper Chief Executive Andrew Harding said at the World Mining Investment Congress here.
Harding noted demand will outstrip supply in the forseeable future as miners struggle to extract more ore from mature projects and deal with constraints such as limited water, declining ore grades and unexpected events such as earthquakes.
Sovereign risk is also likely to become a bigger issued as production "shifts to emerging parts of the world," Harding said.
At the moment 60% of all copper production comes from five nations--China, Peru, the U.S., Chile and Indonesia.
By 2020, 44% of new capacity will come from non-Organization of Economic Cooperation and Development countries, Harding said, compared with 30% now, and the traditional top five producing nations will account for less than half of the new projects, Harding said.
Rio Tinto is planning for the future by investing in four greenfield projects- -Resolution in Arizona, La Granja in Peru, Pebble in Alaska and Oyu Tolgoi in Mongolia.
The Oyu Tolgoi gold and copper project is forecast to be the first to start producing, Harding said. It is expected to produce 450,000 metric tons of copper a year over more than 50 years, placing it among the top 10 global copper mines in the world, he said.
The challenge of the future will be to extract copper from deeper underground while keeping costs down, Harding said.
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@ dowjones.com
The "outlook for copper is positive...demand will be driven by China...India will also contribute," Rio Tinto Copper Chief Executive Andrew Harding said at the World Mining Investment Congress here.
Harding noted demand will outstrip supply in the forseeable future as miners struggle to extract more ore from mature projects and deal with constraints such as limited water, declining ore grades and unexpected events such as earthquakes.
Sovereign risk is also likely to become a bigger issued as production "shifts to emerging parts of the world," Harding said.
At the moment 60% of all copper production comes from five nations--China, Peru, the U.S., Chile and Indonesia.
By 2020, 44% of new capacity will come from non-Organization of Economic Cooperation and Development countries, Harding said, compared with 30% now, and the traditional top five producing nations will account for less than half of the new projects, Harding said.
Rio Tinto is planning for the future by investing in four greenfield projects- -Resolution in Arizona, La Granja in Peru, Pebble in Alaska and Oyu Tolgoi in Mongolia.
The Oyu Tolgoi gold and copper project is forecast to be the first to start producing, Harding said. It is expected to produce 450,000 metric tons of copper a year over more than 50 years, placing it among the top 10 global copper mines in the world, he said.
The challenge of the future will be to extract copper from deeper underground while keeping costs down, Harding said.
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@ dowjones.com
(END) Dow Jones Newswires 05-17-100735ET Copyright (c) 2010 Dow Jones & Company, Inc.
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