Copper reaches tipping point

With copper hitting a multi-year high, copper projects can start moving into the development phase, said Ashley Heppenstall, director at Lundin Mining and chair of Joemaria Resources.

On Friday Heppenstall joined editor Neils Christensen, correspondent Paul Harris and mining audiences manager, Michael McCrae to record Kitco Roundtable.  

Lundin Mining (TSX:LUN) is a copper, nickel, zinc and gold producer. Today, the company reported a $498.1 million in gross profit, an increase of $57.7 million in comparison to the prior year off of strong base metal prices. Heppenstall's Josemaria Resources is advancing a copper-project in Argentina.  

The copper market is firing on all cylinders with the prices pushing above $4 a pound, the metal's highest level since September 2011. April high-grade copper futures last traded at $4.069 a pound, up 4% on the day. The base metal is up more than 56% since the start of the year. In London markets, copper prices are trading at $8,940.50 a tonne. Investors believe copper's future looks bright. Energy transition to renewables is going to require lots of copper.  

Up to now Heppenstall said there has been an extended period where companies did not invest in new supply. Companies were rewarded for conservatism, but the recent spike in copper prices has changed the landscape. When asked if an incentive price for moving projects forward had been hit, Heppenstall said: "we're pretty much there already."

"Boards and management need to be a little bit more aggressive," said Heppenstall, who noted a steep drop in copper supply with demand set to increase.  

During the podcast, David Lin's interview with Peter Grandich was reprised. Grandich is founder of Peter Grandich & Co. With the world embracing renewable energy, nuclear power will see substantially more use in energy grids around the world and with it bring up uranium prices and uranium stocks, said Grandich.  

Heppenstall's Josemaria Resources' feasibility study imagines an open pit operation feeding a conventional process plant at 152,000 tonnes per day over a 19 year mine life, yielding average annual metal production of 136,000 tonnes copper (Cu), 231,000 oz gold (Au) and 1,164,000 oz silver (Ag) per year.