According to a February 2022 report by Bank of America, the copper market is expected to shift into a deficit starting from 2025 due to the completion of ongoing projects. Vanessa Davidson of CRU also predicts a supply gap from 2025, driven mainly by demand outside of China, particularly in Southeast Asia, India, North America, and Europe, fueled by the rise of green technologies and electric vehicles.

Despite sluggish financial markets in China, copper prices remained strong, hovering around $4.50/lb in April 2022 after reaching record highs in March. The price surge can be attributed not only to the anticipated supply gap and future demand but also to the lack of exploration success and lengthy project timelines. Notably, two South American copper plays have stood out in recent years. Solaris Resources experienced significant market capitalization growth in 2021 due to high-grade drilling results at the Warintza project in Ecuador. Similarly, Filo Mining’s market cap reached new heights as it advanced the Filo del Sol deposit on the border of Argentina and Chile.

During the World Copper Conference, BHP’s president of minerals – Americas, Ragnar Udd, highlighted the company’s early-stage investment in Filo Mining, emphasizing the scarcity of such assets in the market. Hayden Locke, CEO of Marimaca Copper, echoed this sentiment, stating that while there is a strong appetite for copper exposure, there are limited projects with short timelines for production and independent financing. Marimaca Copper is currently developing the Marimaca oxide project near Antofagasta, employing a heap leach SX/EW approach that reduces project capital expenditure and environmental impact. The company has adjusted its timelines due to successful exploration results, potentially expanding the scale and lifespan of the project.

Another promising junior copper player in Chile is Hot Chili Limited, which reported a resource upgrade for its Costa Fuego project. With proximity to existing infrastructure and low-altitude locations, Costa Fuego is well-positioned to contribute to the decarbonization efforts and meet the forecasted supply gap.

World Copper, a study-stage junior, owns projects in Chile and Arizona. The company released a positive preliminary economic assessment (PEA) for its Escalones project, highlighting its significant value and growth potential. Exploration targets for 2022 include unexplored areas of the resource and additional copper targets. The soaring demand for copper and the scarcity of viable projects indicate a promising future for the copper market. However, the industry will need to address the supply gap by accelerating exploration efforts and streamlining project timelines.

Anticipated Supply Gap Drives Soaring Copper Demand

A report by Bank of America suggests that the copper market will face a deficit from 2025 as ongoing projects near completion. Vanessa Davidson of CRU also forecasts a supply gap driven by increasing demand outside of China, particularly in Southeast Asia, India, North America, and Europe, fueled by the growing adoption of green technologies and electric vehicles.

Despite sluggish financial markets in China, copper prices remained robust, maintaining a price of around $4.50/lb in April 2022 after reaching record highs in March. This price surge can be attributed to the expected supply gap, future demand, and the industry’s struggle to find new exploration successes and expedite project timelines. South American copper projects have garnered attention in recent years. Solaris Resources experienced substantial market capitalization growth in 2021 due to successful drilling results at the Warintza project in Ecuador. Similarly, Filo Mining’s market cap soared as it advanced the Filo del Sol deposit on the border of Argentina and Chile.

During the World Copper Conference, BHP’s president of minerals – Americas, Ragnar Udd, highlighted the scarcity of such assets, emphasizing the company’s early-stage investment in Filo Mining. Hayden Locke, CEO of Marimaca Copper, echoed this sentiment, noting the limited availability of projects with short production timelines and independent financing.

Marimaca Copper is developing the Marimaca oxide project near Antofagasta, implementing a heap leach SX/EW approach to reduce capital expenditure and environmental impact. Successful exploration results have led to adjustments in project timelines, potentially expanding its scale and lifespan. Hot Chili Limited, another promising junior copper player in Chile, reported a resource upgrade for its Costa Fuego project. With proximity to existing infrastructure and favorable low-altitude locations, Costa Fuego is well-positioned to contribute to decarbonization efforts and meet the projected supply gap.

World Copper, a study-stage junior, owns projects in Chile and Arizona. The company released a positive preliminary economic assessment (PEA) for its Escalones project, highlighting its considerable value and growth potential. Exploration targets for 2022 encompass unexplored resource areas and additional copper prospects. The soaring demand for copper and the limited availability of viable projects paint a promising future for the copper market. However, addressing the supply gap necessitates accelerated exploration efforts and streamlined project timelines.