Copper’s $149bn mine pipeline stalls as deficit nears – by David Stringer ( – July 7, 2016)

Lack of financing to scarcity of water delaying mine projects.

he $149 billion pipeline to expand the world’s copper supply is running into trouble.

Producers are counting on expansions and the development of new operations to meet supply shortages they forecast arriving toward the end of the decade. The plans are fraying as reluctant lenders, political wrangling, technical obstacles and a lack of water and electricity push back project deadlines from Papua New Guinea to Peru.

Only six major projects to build new mines or expand existing operations will be completed by 2020, with two of that total still at risk of potential delays, according to researcher CRU Group. That compares with a global slate of about 80 planned developments, according to Bloomberg Intelligence.

Freeport-McMoRan, the largest publicly listed copper producer, forecasts an end to the metal’s current surplus from next year as demand improves and output drops. Chile’s state-owned Codelco, the top producer, is predicting a deficit by 2018, while BHP Billiton, operator of the world’s biggest copper mine, sees a shortage from 2019.

“Our project pipeline has thinned considerably over the last year as we have factored in further delays,” said Christine Meilton, principal consultant on copper supply and raw materials at CRU in London. While the industry is confident about an emerging deficit, it remains difficult to raise finance for projects as low prices deter investors, she said.

Global production exceeded demand in five of the past six years, partly because of slower growth in China, the biggest user, data by Bloomberg Intelligence show. Copper has tumbled more than 50% on the London Metal Exchange from a record $10 190 a metric ton in 2011, touching close to a seven-year low of $4 318 a ton in January.

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