According to a report by S&P Global Market Intelligence, copper exploration’s total budgets increased 21% to just shy of $2.8 billion in 2022, the highest level since 2014.
The increase was driven by a strong recovery for the price of copper since hitting multi-year lows at the outset of the global pandemic.
The copper price has doubled from March 2020 when the bellwether metal briefly fell below $2/lbs ($4,400 a tonne) and prices are set to stay elevated given the rosy demand outlook through the end of the decade.
Last year saw two large copper mines start up operations – Anglo American’s 60%-owned Quellaveco in Peru and Cukaru Peki (Timok) in Serbia, which is wholly-owned by China’s Zijin Mining. Teck Resources’ Quebrada Blanca in Chile will follow this year, while two other major projects, Udokan’s eponymous mine in Russia and Rio Tinto’s Oyu Tolgoi underground expansion, are currently under construction.
S&P Global sees a market surplus over the next three years (–285kt this year) but after this bulge in additional tonnes coming online, the pipeline narrows substantially, with a nearly 400kt undersupply in 2026.
S&P Global points out that fatter exploration budgets over the past several years – most of which being spent in Latin America – have not led to a meaningful increase in the number of recent major discoveries:
“While copper reserves and resources have increased by 50 million tonnes compared with our analysis last year, most of the increase came from assets discovered in the 1990s,” say the authors.