A copper shortage has crept up on the world faster than previously predicted. Citi analysts are now reporting that the copper supply deficit will move into 2017, a supply problem that hasn’t lifted the commodity in more than six years.
The price of the red metal has risen by 30 percent over the past twelve months, which analysts believe is linked to the continuous growth in demand from China as well as the steadily increasing time it takes to go from discovery to production.
As technology improves and people’s preferences transition from oil and gas to renewable energy, copper will be highly sought after. Citi said it expects copper prices to move above $8,000 a tonne before the end of 2020.
An increasing demand from China, as well as a rise in construction building, power infrastructure and transportation, could potentially give the copper market a 15 percent boost over the next five years.
Mining giants BHP and Rio Tinto have seemingly realised the strong upcoming demand for copper and set out to find new deposits. BHP increased its annual exploration spending by 29 percent this year, allocating nearly all its $900 million budget to finding new copper and oil deposits.
But there is a problem; according to Western Copper and Gold, “Copper is not being discovered fast enough to be mined to meet upcoming demand”.
However, SolGold CEO Nick Mather is confident that the company’s Cascabel mine, alongside a string of additional copper projects, could make SolGold a significant producer in the next five years.
SolGold’s 85 percent owned Cascabel copper gold porphyry project in northern Ecuador has consistently produced high-class results, and the company have since applied for more ground in Ecuador and plan to use the Cascabel blueprint in other parts of the highly prospective country.
As the world comes to terms with the inevitable shortfalls in copper over the next decade, London listed SolGold’s copper gold resource that looks increasingly likely to find itself in development right about when copper hits its greatest frenzy.