Why Copper


“A declining resource base and aging assets will require miners to access new resources in key new geographies to meet future demand” – Glencore, BAML presentation May’17

Mongolia Copper

Adapted from Glencore, BAML presentation May’17 - new copper geographies listed are highlighted in gold, with the largest consumer of copper, China, highlighted in black



Copper Fundamentals

Record consumption of copper and depletion of reserves

  • Copper ranks 3rd in global metal consumption
    (~US$120 billion pa primary demand)
  • Robust demand in downturn and expectations for future growth
    • Bernstein estimates global copper supplies would need to double to meet forecasts demand for electric cars by 2035
    • Refer to Glencore May’17 BoAML presentation for excellent summary on outlook for EVs
  • Previous commodity cycle’s new supply has peaked
  • Estimated 4% pa average decline in existing capacity1

...mine project pipeline at lowest level in 6 years

  • “The global copper industry needs a new Escondida mine (the worlds largest copper mine) every 15 months over the next 10 years in order to meet global demand ...”
    JS (CEO Rio Tinto)
  • Lack of new exploration projects in the pipeline

Without projects supply gap will exceed 15Mt by 2035

Mongolia Copper

Many key operations set to exhaust their current reserves
Peak historic/forecast annual copper production (‘000t) vs Expected LOM (year)

Mongolia Copper

Almost all the uncommitted projects are needed by 2035
Forecast committed copper mine production and potential from uncommitted projects*

Mongolia Copper

* Committed production after disruption; Uncommitted before any adjustments