Big copper deals to take centre stage in Santiago as demand heats up
Business
Copper prices touched a seven-week high last Friday
SANTIAGO (Reuters) - Global copper producers are converging in Chile this week for their largest gathering since 2019, with talks expected to centre on the industry's growing M&A wave amid surging demand and tight supply for the metal anchoring the green energy transition.
The buyout trend comes as indigenous groups, host communities and others increasingly oppose the industry's attempts to build new mines, obstacles fuelling the growing realization among mining companies that they may need to combine in order to grow.
Leaders from all three companies are slated to be among the roughly 450 investors, executives, analysts and regulators gathering in the Chilean capital of Santiago for the annual World Copper Conference.
Registrations are up roughly 8% since 2019 when the conference was last held fully in person. Organisers say they expect the attendance to grow as the week progresses.
Global copper demand expected to reach 53 million tonnes annually by 2053 - more than double current levels - but supply is still expected to fall short, according an S&P Global study. That projection in part underscores the deal rush.
BHP Group Ltd. the world's largest mining company, last week won shareholder approval for its $6.4 billion takeover of Australian copper producer Oz Minerals Ltd.
Mining giants face the creeping problem of attracting new workers, especially in the United States, as well as competition from upstart rivals exploring new ways to extract copper at the bottom of the Pacific Ocean and through leaching of mine waste.
"This is a fairly agile market and it is permanently evaluating its long-term investments," Chilean Mining Minister Marcela Hernando told Reuters.
Copper prices touched a seven-week high last Friday despite macroeconomic concerns fuelled by uncertain Chinese demand projections and the ongoing war in Ukraine, although they are down nearly 5% from a seven-month high of $9,550.50 reached in January.
"We expect the copper market to remain in deficit as the green transition accelerates," Fitch Solutions said in a recent report to clients.
A portion of the weeklong conference is devoted to research presentations on new applications for the red metal, part of an industry plan to go on the offense against aluminium, a cheaper but less-efficient alternative to conduct electricity.
