BHP expresses confidence in copper, foresees 10% CAGR for next three years
Diversified mining giant BHP Billiton (ASX:BHP) has expressed strong confidence in the long-term outlook for the global copper market.
During a briefing for analysts BHP said it expects overall output to maintain a 10% compound annual growth rate from now until the end of 2015 despite supply interruptions and delays.
The company’s confidence in the base metal is derived from long-term projections for augmenting demand from developing giants such as China and India.
BHP says that copper demand is driven by both investment and consumption led growth, and enjoys the additional advantage of weak substitution risk in key areas such as construction, power and electronic consumer goods.
The diversified mining titan also notes that while China is currently the key export market, demand for copper is ubiquitous to developing economies during their construction and investment phase.
The company is currently stewing over more economical means of expanding its hampered Olympic Dam operations, requesting a 46-month extension for the project from the South Australian government.