China, China, China
Do you know SEA countries already out-consume North America and Europe in Copper, but their per capita consumption is still less than 25% of ours? and their basic infrastructure in copper is not even 10% of the West? That means 10 times the consumption or more -- for near a decade just to come up to our level of in place metals, and then even more to reach our level of per capita consumption? Can you imagine 20,000,000 tons of copper consumption per year? It is possible it may be needed for a while.
Can this mean a declining price of metals?
I would not think so. You could talk about waxing and waning within narrow ranges in metal prices 30 years ago just from the fact that basic Western metal consumption would appear to have peaked. Growth therefore came in fits and starts due to random conditions due to prices choking back exploration and new tech and wars occasionally giving a spurt to usage. But that was before Asia begin to grow seriously. In the past ten years we have woken up to the fact that progress in Asia is unstoppable. They are not going to be satisfied with dog carts much longer. (I would not mind a St. Bernard pulling a cart in TO right now, with a barrel Southern Comfort around its neck.)
The general trend is up major. We have to keep our eye on that. That makes mine planning a no brainer. We can look forward ten years and bank on a customer paying a premium for the product. Of course it needs finer analysis than mere arm waving and fluctuations will continue. The whole supply demand equation is subject always to short term surges, from strikes to temporary over/undersupply driven by everything from hedging to weather to accidents at major mines and smelters. But the overview in metals is very rosy for some time to come.
The rumblings about Chinese and other investment entities searching about for sources of metals have been with us for several years now. The Chinese tried to buy Noranda just two years ago. I have personally run into nickel buyers, copper buyers and iron explorers all with rich overseas connections. And I keep running into them. At one time I viewed base metals as solely a big boy's game. But now the market is fragmenting and that is good for the scalpers and the little guys who are there to pick up the pieces with the new tools of bulk communication, super size shipping and bulk mining. We have to get down and dirty from scrap to old mines. The money is there, we just have to put on the explorer's boots, the mine renovator's hats and get cracking.
Personally I would take a new look at people like III and others who have significant resources. They just might be the blue chips of tomorrow.
EC<:-} |
