WITH rich copper profiles and production increases predicted at South Australian copper mines, Australia’s “other” resources state looks well positioned to capitalise on increased Chinese investment, according to Prominent Hill owners OZ Minerals.
OZ Minerals Limited’s managing director Terry Burgess said recent Chinese investment in copper was creating opportunities for expanding South Australian copper.
“Since 2007, China has invested in 17 copper projects and companies worldwide, totalling around US$17.5 billion,” Burgess said.
“These investments have been in South America, southern areas of Africa, South East Asia and within China, and obviously Australia.
“In particular, China’s growth is now leveraged off a much larger population and economic base, with a GDP of around US$9 trillion and growth forecasts above 7 per cent for this year and next including, for example, quadrupling the current high speed rail line network to 50,000 kilometres by 2020…That will mean higher demand for copper.”
Burgess told delegates at today’s Paydirt conference, held in Adelaide, that additional global copper production would be required in 2016-2017 in order to meet this new demand surge.
OZ Minerals has invested heavily in the past 12 months in its 100 per cent-owned Prominent Hill copper mine, and has forecast production of between 75,000 and 80,000 tonnes of copper concentrate this year, and between 130,000 and 140,000 ounces of gold, with higher still outputs forecast for 2015.
The Company expects to commence first underground stoping of Prominent Hill’s Malu reserve in the fourth quarter of this year.
“This will happen at a time there are very few large copper projects now under construction, and many brownfields copper projects face the similar development challenges as greenfields projects currently do – water, power and permitting issues,” Burgess said.
“This is leading to a shortfall of expected supply each year.
“The situation is exacerbated by the fact Chile, as the world’s top producer, faces power and water shortage challenges, increasing costs of labour, increasing taxes and lower copper grades.
“To our north, the situation in Indonesia remains unclear. Some companies have cut copper production without being able to export copper concentrates.
“The combination of these factors delivers South Australia, with its rich copper profile, a natural competitive advantage.
“With Australia ranking number one in the latest Behre Dolbear annual survey ranking of countries on their investment appeal, that makes South Australia particularly attractive for new copper investment.”
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