BMO connects the dots of the Tesla Energy rEVolution demand for the secure supply of Green Energy Metals and available resources into the global long-term supply and demand picture for Copper.
“Based on our thorough analysis of long-term demand, supply and incentive pricing, we have raised our long-term copper price forecast to US$3.25/lb (from US$3.05/lb), above the consensus real long-term price of US$2.95/lb,” BMO said.BMO says renewable energy infrastructure is the biggest single driver of global demand growth for copper over the coming years, with the need to connect significant numbers of small-scale electricity generation units into the grid providing “a major boost” to copper – with solar generation capacity set to triple and wind capacity double by 2025.“We expect copper demand growth rates through to 2030 at above 3% compound annual growth rate,” BMO said.
Red metal goes Green with renewables taking the charge in energy generation. Dramatical reduction in the cost of Solar and Wind power and cheap Lithium Batteries are changing everything.
We are entering into the new commodities supercycle for Green Energy Metals which is driven by The Switch to Clean Renewable Energy Generation. Electric Cars will be taking over on the consumer side of the energy distribution providing mobility on demand with "pay as you go" service in the future.
Smart Grids will disrupt Power Grid business like mobile phones have disrupted the fixed lines communications. This explosive demand for Green Energy Metals will be met with supply side struggling with the disruptions due to the labor disputes and Resource Nationalism, lower head grade in existing mines and the fact that "Copper exploration has been increasingly unsuccessful."
TNR Gold holds NSR Royalty on Los Azules with McEwen Mining with a very impressive USD $127 million potential undiscounted cash flow presented by McEwen Mining in their PEA. I must mention that TNR Gold QP was not able to verify any data presented by McEwen Mining and no indication of values should be taken as an investment advice here, as usual.
TNR Gold Los Azules Copper Royalty With McEwen Mining: The World's Biggest Miners Want More Copper But Nobody's Selling.
Thomas Biesheuvel reports from the boardrooms of major mining companies confirming my observations for TNR Gold from the ground in Argentina. There is a growing appetite for the copper assets and majors are hunting for the best projects to replenish the exhausted production pipelines. Nobody is ready to sell the operating mines and companies will have to look at the development opportunities left.
We have discussed heating up mining M&A activities on the example of Pascua Lama with Barrick Gold and Los Azules with McEwen Mining in Argentina. The charts below are putting this situation into perspective. Copper head grades are going lower, existing copper supply is threatened by labor disputes interruptions and exploration for the new projects has been "increasingly unsuccessful" ...
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Please Note that TNR Gold Qualified Person - as it is defined by NI 43-101, was NOT able to Verify and Confirm Any Provided Information by The Third Parties in the Articles, News Releases or on the Links embedded in this post; you must NOT rely in any sense on any of this information in order to make any Resource or Value Calculation, or attribute any particular Value or Price Target to any Discussed Securities.
"On the Los Azules side, McEwen Mining has revamped its website putting a lot of new information about this "sleeping giant". The new road to the project is being under construction now and potential JV partners are being dated in order to move the project to the development stage. Mining Secretary Daniel Meilan was talking about Los Azules as the next huge international business opportunity for Argentina after Pascua Lama's development challenges with Chile. And he has delivered his part of the promise: last year the mutual protocol was signed between Argentina and Chile about the support for the development of Los Azules. Now Rob McEwen's Midas touch will be in play - what international mining house can he engage to unlock the value of his "sleeping giant"? Read more."
"TNR Gold holds NSR Royalty on Los Azules with McEwen Mining with a very impressive USD $127 million potential undiscounted cash flow presented by McEwen Mining in their PEA. I must mention that TNR Gold QP was not able to verify any data presented by McEwen Mining and no indication of values should be taken as an investment advice here, as usual. Read more."
"The winter is warming up in Argentina and we can have a very hot spring for the M&A deals in Southern Hemisphere following the heatwave all over the Globe. Trade Wars will come and go and the smart money will be moving forward. There is just one planet Earth and we have our investment supercycle in place with supercharged new market dynamics. On one hand, we have to protect our planet and build very fast the new infrastructure for the Tesla Energy rEVolution and on another hand, the secure supply of Green Energy Metals becomes crucial while new discoveries are getting harder and harder to find and even more challenging to put into production. Read more."
Resources Rising Stars:
Renewable energy to drive copper demand, says BMO
"Copper has one of the best longer-term fundamentals among commodity markets, according to BMO Capital Markets, prompting the global broker to lift its long-term copper price forecast by 7% to US$3.25/lb.
BMO says the upgrade reflects its “increased confidence and positive view on copper”, advising investors to “accumulate shares in companies with growing copper production and improving balance sheets”.
“Based on our thorough analysis of long-term demand, supply and incentive pricing, we have raised our long-term copper price forecast to US$3.25/lb (from US$3.05/lb), above the consensus real long-term price of US$2.95/lb,” BMO said.
BMO says renewable energy infrastructure is the biggest single driver of global demand growth for copper over the coming years, with the need to connect significant numbers of small-scale electricity generation units into the grid providing “a major boost” to copper – with solar generation capacity set to triple and wind capacity double by 2025.
“We expect copper demand growth rates through to 2030 at above 3% compound annual growth rate,” BMO said.
“Changing long-run commodity prices should be a rare event and should only take place where there is a marked shift in the future outlook,” it says.
“In our view, the growth trend in copper demand owing to a combination of rising renewable energy forecasts and increased consumption in the automotive sector as the electric vehicle trend accelerates is such an event.
“Importantly, these are global trends rather than China-specific ones, with these sectors adding ~6Mt of copper demand by 2025.”
BMO says a copper price above current levels is required to incentivise new production with the copper project pipeline “thin” compared to history.
“The current probably and highly probable copper pipeline is currently the lowest we have seen this century, both in terms of number of projects and capacity,” it said.
“Recent years have seen both cancellation and delivery of potential projects, and both of which have served to reduce the list and shorten the x-axis on our incentive price curve. We see the need for ~5Mt of new projects from new primary mine supply to bring the market into equilibrium over the 2025-203 period.”
BMO forecasts that the copper market will move into a significant deficit over the 2019-20 period, owing to lack of supply growth.
While most of the copper stocks covered by BMO are major North American companies such as First Quantum, Teck and Ivanhoe, local copper stocks like Sandfire Resources (ASX: SFR) benefited from the bullish sentiment towards copper (and a rising price for the red metal) during the week.
Sandfire hit a record high of $9.31 during the week, capitalising the debt-free producer at nearly $1.5 billion."
