Copper prices don’t reflect red alert, summit hears

Richard Roberts

Editor in chief

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FT Mining Summit 2023 copper panel (left to right): Financial Times' Harry Dempsey, Codelco's Maximo Pacheco, Freeport's Kathleen Quirk, and Anglo's Paul Gait
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So-called counter-cyclical investment in new copper production remains “easier said than done”, Anglo American group head of strategy Paul Gait told this week’s FT Mining Summit in London, despite strong conviction in the industry about long-term higher price trends underpinned by new demand for the red metal.

Gait said while recent history (back to, say, 1770) suggested that, “yes we should” invest in new production through – particularly low points in – repetitive cycles based on the evidence that “higher prices then increase the reward for those that are prepared to act in that manner”, there remained general reluctance to do so.

An FT summit panel featuring Gait, Freeport-McMoRan president Kathleen Quirk and Codelco chair Maximo Pacheco also indicated current escalation of project costs and uncertainties around the future impacts of technology on supply and demand made investment decisions trickier.

“I think that investing counter-cyclically is something that everybody in the industry claims [to be positive but] then the evidence is that it’s much harder to do,” Gait said.

“It gets back to … well, how do you manage all of your stakeholders to get all of them aligned to enable you to act sort of counter-cyclically.

“There’s always the uncertainty about what the demand forecast will be.

“So acting counter-cyclically and the desire to do so are not necessarily the same thing.

“And of course this then builds that feedback loop that makes it harder to build supply.”

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