Peru, Chile, Panama Shut Down Mines, Disrupting Global Copper Supply
Africa Emerges as Potential Solution to Looming Copper Shortage.
Copper is vital for the transition to net zero, playing a critical role in developing electric infrastructure, power plants, and cables. The demand for Copper is expected to double by 2030, with more than 50% of the Copper produced in 2020 coming from nations categorized as ''unstable'' or ''unpredictable.'' Copper is fundamental to renewable energy infrastructure, energy storage systems, and electric vehicles. It is an essential mineral in manufacturing electric cars, EV batteries, EV buses, EV earthmovers, EV trucks, EV ships, weapons, electrification of everything infrastructure, solar panels, wind turbines, consumer products, and power grids.
The potential supply-demand gap for Copper is expected to be significant as the transition to clean energy proceeds, which could pose severe challenges to the net-zero goals.
The world's largest copper producer, Codelco, is in financial distress at current copper prices (just under $4.00/lb.)
This screams 5 Rocket Ships 🚀🚀🚀🚀🚀
Flashing BUY COPPER SIGN.
But please consider an investment strategy that avoids Peru, Chile, or other Latin American producers until further notice. Latin American Jr Miners advancing deposits are good still. This is only a temporary notice. World events could change next week.
More on Codelco and other recent problems in Latin America.
Copper prices will increase significantly as we move into supply-constrained markets in the next few months and years.
Codelco'sCodelco's credit rating was downgraded by S&P Global Ratings by two notches.
The long-term foreign currency rating was lowered from A to BBB+.
Output slump leads to increased debt levels for project funding.
Production is at its lowest in 25 years, and costs have surged.
A $40 billion overhaul is underway to address late and over-budget projects.
S&P expects Codelco to use more debt in 2024 than previously anticipated.
No anticipated capitalization from the owner or other alleviation.
Stable outlook due to the high likelihood of government support in financial distress.
The top 3 copper producing countries in the past have been
Chile: Produced 5.2 million metric tons of Copper in 2022, maintaining its position as the top copper producer
Peru: Produced 2.2 million metric tons of Copper, making it the second-largest producer globally
China: Produced 1.8 million metric tons of Copper, securing the third spot in global copper production
Panama just shut down the Cobre Panama mine 76% of Panama's exports (by mass) SHUT DOWN
Now, think of this. Panama has constantly been conjoined to the USA's foreign policy. If Panama stops production, then this signals enormous challenges for Latin America.
The Cobre Panama mine, owned by First Quantum Minerals, was shut down due to mass protests, a labor dispute, and environmental and community pushback. The protests were sparked by a mining contract between the Panamanian State and First Quantum Minerals, with demonstrators expressing opposition to the expansion of mining in Panama, citing concerns about its adverse effects on biodiversity and human health. The shutdown was also influenced by a tax dispute and political negotiations, leading to the cessation of copper ore processing and preventing shipments out of the country, exacerbating the situation.
Shutdowns in Latin America follow these three reasons.
1. Labor disputes
2. Environmental issues
3. Community concerns that the jobs promised never occur.
”The rural poor only see the ore exiting their economy and often the value is added later down the chain and lining the pockets of North Americans at the expense of the labor and resources of the Latin Americans, a form of neo-colonialism"
Here are some recent conflicts for Copper in Latin America
Antapaccay Copper Mine, Peru:
January 2023: Vandals attacked Glencore's Antapaccay copper mine, leading to the temporary halt of mining operations and the evacuation of 2,000 workers
Other recent incidents
Ponderosa Mine, Peru, less than a month ago
Nine people were killed and 15 injured in an attack at the Ponderosa mine, which is known for its copper and zinc production.
Protests in Peru:
Ongoing protests and violent clashes in Peru, with 39 people killed in protests and related accidents, led to significant social unrest and political instability.
Chilean Mining Unrest:
Disruptive unrest in Chile from labor issues, with influential mining unions demanding pay increases and bonuses, leading to protests, roadblocks, and supply chain disruptions
Las Bambas and Cuajone Mines, Peru:
Massive protests in Peru led to the suspension of copper output from the Las Bambas and Cuajone mines, impacting the country's copper production and causing significant economic repercussions.
Cobre Panama, Panama: Just this month
Ongoing protests and labor disputes at the Cobre Panama mine, with concerns about the adverse effects of mining on biodiversity and human health, led to mass demonstrations and disruptions.
Violence and Protests in Peru:
Peru's mining south has been rocked by deadly protests, with 39 people killed in protests and related accidents, leading to significant social and political instability in the region.
We have covered this myth repeatedly.
North Americans view Africa as having more risk than Latin America, but right now, Africa is much safer for copper production than Latin America.
We're not suggesting this is a permanent trend, but with Peru, Chile, and Panama in Politically Perilous and Precarious environments African is the Go To for Copper right now.
Pixy Projects - discuss mining projects around ore grade and other key metrics.
Pixy Predicts - Pause in Latin America copper mining projects until further notice. Junior miners operating in Latin America are not really subject to this risk because they are only advancing their mineral resources not currently producing.
Pixy Picks - ALL EYES ON AFRICA 🚀🚀🚀🚀🚀
Trigon Metals
With some mining stocks, The Gamble is risky. Will they ever bring Metal to Market?
Meanwhile, Trigon Metals is up and running, delivering copper reserves in a Global Supply Deficit where past producing Jurisdictions are Shutting Down Copper.
Copper is the #1 Metal for Future Energy & Infrastructure Growth
1. Play the Hand that is dealt.
2. Go with the Company that is Open for Business
3. Mineral Wealth rates Namibia Africa Jurisdiction (less risk than Latin America) by far
Don't Gamble. Win with a Copper Producer.
Trigon Metals TSX-V: TM // OTCQB: PNTZF
Leading the Way in Copper Production
Disclaimer - Pickaxe and/ or Mineral Wealth received zero compensation for this Trigon Metals Pixy Pick.
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