The Role of Copper

A Great Copper Squeeze is Coming for the Global Economy
September 2022 

Copper is on the Critical Minerals list globally. It is required for the move to electrification as the world moves away from its dependence on fossil fuels.

Recent activities have resulted in the copper price hitting an all-time high and coming back down as fears of global recession abound. The aspirations of the world to electrify have not changed and recent price drops serve to further tighten the developing mine pipeline. As the CEO of the largest copper producing company said in September 2022 “ The short-term situation is contributing to the stronger outlook longer term because it’s having an impact on supply development”

Supply disruptions and critically low levels of stocks have marked previous months. Russia produces only 3% of the world’s copper but supply is already tight. This is adding extra importance to Chilean copper, which accounts for 28% of global copper supply. The demand for an increase in copper projects being developed and subsequently getting into production has never been greater, which is why deposits such as Los Andes Copper’s Vizcachitas Project are so globally important. Explore the presentation to find out more about the Project, located in Chile’s world class copper belt..

Investment in copper, and the projects from which copper is produced, is critical to the modern world - it is estimated that by 2050 global urbanization could impact an additional 2 billion people. https://www.bloomberg.com/news/articles/2022-09-21/copper-prices-fall-despite-signs-of-looming-crucial-metal-shortage

Electrification is Coming

The modern world is moving away from fossil fuels to cleaner sources of energy and this is expected to greatly increase the demand for copper. Electric Vehicles (EVs), renewable energy and electric storage all use large amounts of copper. Due to copper’s unique properties, it is an excellent conductor of electricity and can be easily made into flexible wires required in the manufacturing of mobile phones, heating, green technology, infrastructure and 5G.

Los Andes Copper is listed on the TSX-V exchange and traded on the OTC market

Global Shift to Urbanization Requires More Copper

Urbanization and improving standards of living are occurring globally. Initially, Asia was the centre of growth, now Africa and other parts of the world are urbanizing. As populations grow so does the requirement for copper which is needed for transportation, infrastructure and communication technologies. Additionally, copper is also essential to plumbing, heating and electrical wiring, and research shows as the wealth of a household increases so does the use of copper in that house.

Renewables Need More Copper

Renewable energy sources, such as wind turbines and solar panels, require up to six times more copper than fossil fuels. Additionally, more copper is then needed for energy storage and to connect these sources to the grid. Government policies are driving the requirement for renewable energy which consequently drives increased copper use.

Copper is Harder to Find and Develop

New large copper discoveries are becoming increasingly difficult to identify, at a time when the world is expanding its use of, and need for, copper. This means that mineral extraction companies are having to explore in areas where it is increasingly difficult to operate. Additionally, many of the large, exposed copper deposits have already been mined for decades meaning that copper grades are continuing to decline and there is limited scope to expand resource potential.

There are exceptions, however. Los Andes is progressing its Vizcachitas Project, located in the heart of Chile (the world’s largest producer of copper providing approximately 28% of the world’s copper supply), where it has identified a large Measured and Indicated Resource including 13 billion pounds of copper.

Supply and Demand of Copper and What it means for Copper Prices and the Miners

Bloomberg reported in September 2022 that a short fall of just 0.4 million tonnes of Copper resulted in a 20% move up in the price of copper. A short fall of 14 million tonnes reported by BloombergNEF by 2040 would be extreme.

For companies with world class deposits of copper it is an important global advantaged position.

LOS ANDES COPPER

Los Andes Copper’s 100% owned Vizcachitas Project is one of the largest, unrecognised copper deposits in Chile that is not controlled by a major mining company. A team of experienced senior engineers, who have worked for large copper companies, have patiently assembled the land package and outlined a responsible and sustainable way to extract copper at the Los Andes’ Vizcachitas Project.

The next steps to bring this copper to the market are very exciting. Drilling to find the limits of the deposit is ongoing and detailed engineering is underway. More information on the progress at Vizcachitas, including the latest drill results, can be found on our Company news page.  

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