Why copper miners prefer brownfield projects

Energy transition is going to require a lot of copper, but miners are still cautious, said Kitco correspondent Paul Harris.

On Friday Harris recorded Kitco Roundtable with mining audiences manager Michael McCrae and CEO and co-founder of Enduro Metals, Cole Evans. Enduro Metals (TSXV: ENDR) is an exploration company focused on British Columbia’s Golden Triangle.

In late March Harris covered the CRU World Copper Conference 2022 in Santiago, Chile.

According to CRU presentations at the show, there is a six-million tonne per year supply deficit for copper. The deficit will require about $100 billion of investment, but miners are mostly limiting risk by developing brownfield sites, areas that were previously mined.

"Mining companies are pretty much focused on brownfield projects where they perhaps already got permitting," said Harris. "They've already got relationships with communities and local government. Companies do not want to engage in greenfield developments at the moment. I guess the feeling is [greenfields] are just high-risk from a permitting point of view, from a cost view and from a cost overrun point of view."

Cole said there will be an eventual turn to greenfields development.

"There's only a finite amount of brownfields projects," said Cole. "I think you're going to start to see a transition."

Kitco Roundtable is sponsored by Golden Minerals.