![price of copper per pound price of copper per pound](https://m.media-amazon.com/images/I/51vQaSovlaS._SL500_.jpg)
This group is made up of large miners you’ve likely heard of. The chart below shows the average annual reserve grade of the world’s global copper producers. The lower a mine’s grade, the more digging, and processing its operator must do to produce copper. One of the best measures of a mine’s quality and potential profitability is a metric called “ore grade.” It measures how much metal a miner gets for every tonne of rock and dirt it digs up. In my book, copper-producing AK-47 parts of the world are Russia, Congo, Iran, Mongolia, Saudi Arabia, and Kazakhstan. They are not the kinds of places I’d take my family for a vacation. The countries are known for not having great respect for contracts and property rights (and often human rights).
![price of copper per pound price of copper per pound](http://sc.cnbcfm.com/applications/cnbc.com/resources/files/2015/07/16/copper.jpg)
These are places where it isn’t uncommon to see people walking around with AK-47s. I count the U.S., Canada, Australia, all of Europe, Chile, Peru, and Brazil in this group.Ībout 32% of copper mine production occurs in AK-47 countries. I often call these countries “non AK-47 countries.” In these places, you normally don’t see random people walking around cities with AK-47 machine guns. More than half of this mine production – 68% – occurs in mining-friendly or relatively mining-friendly countries. The remaining 17% of mined copper comes from secondary production where the main metal produced is not copper. Here are the details.Ĭurrently, 178 producing copper mines supply 83% of the world’s copper. There are also some large undeveloped copper deposits in the world that can and will be put into production, but the shovels won’t start digging unless copper is substantially higher than current levels. In other words, it will cost more to mine each pound of copper mined in the future. They were great in their prime, but their ability to produce is steadily decreasing.Įxisting mines still have plenty of copper ore, but it is less plentiful and it’s of lower quality (lower grade). To use an analogy, most of the world’s big copper mines are like former all-star ballplayers in their late 30s and early 40s. They have been in operation for decades, and their richest parts have been tapped. We’ll get into the data below, but in preview, the world’s largest, most important copper mines – the ones that set the global copper price – are in decline. The answer is “Yes, but not with copper at $3 per pound.” If we believe annual copper demand is set to soar over the next 25 years, the next question we have to ask is, “Can the copper mining industry supply that much?” It translates into a nearly three-fold increase in global demand over the next 25 years.
![price of copper per pound price of copper per pound](https://chulavistacoins.com/wp-content/uploads/2019/03/copper-pennies-01-01-1000x1000.png)
While this might not seem like much, it’s actually enormous demand growth for a mature market. In yesterday’s essay, I stated that I expect Electric Vehicles to be the driving force behind global copper demand increasing at 4.5% per year for the next 25 years.