MINING & ENERGY Rio Tinto partner Freeport tips copper price to...

MINING & ENERGY
Rio Tinto partner Freeport tips copper price to rise to boomtime high

The Australian
3:19PM July 26, 2017

Matt Chambers
Resources reporter
Melbourne
@mattchambers1

Copper prices could rise to boomtime highs of more than $US4 a pound because of unexpectedly low supply as global growth continues to grow, says Rio Tinto’s operating partner in the big and controversial Grasberg copper and gold mine in Indonesia, Freeport-McMoRan.

The prediction, from Freeport chief Richard Adkerson, came as copper prices jumped 4 per cent overnight to a two-year high of $US2.84 on Chinese growth and tight supplies, buoying global resources stocks including Rio and BHP Billiton.

And in good news for Rio, whose interest in Grasberg has been looking less valuable in recent times, Freeport says progress has been made in a stand-off with the Indonesian government that has slashed output this year.

Speaking to investors after the release of Freeport’s second-quarter earnings last night, Mr Adkerson said global copper supplies were only going to get tighter as growth spurred more demand for the industrial metal, which is often seen as a barometer for economic growth.

“You’re going to see a period of time where there’s going to be a shortage of copper, and you’re not going to see the price (just) go to $US3,” he told investors.

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“We just need to look over our shoulders and we can see at times we had copper at $US4, and we’re heading for a world of where that is, I believe, in the cards.”

The last time copper was at $US4 was in 2011, when it rose to an all-time high of $US4.62.

Until October, prices had been stuck in a year-long range of $US2 to $US2.25.

“There are some projects that are being completed and so forth, but the wall of copper that was supposed to come about in 2016 didn’t show up,” Mr Adkerson said,

“And now to justify the coming wall of copper, some people are saying you can develop these new mines at $2.50 or less and that just can’t be done. It just can’t be done.”