Hudbay Minerals Inc. 's finance chief said the world needs more mines to meet demand for copper and other battery metals to shift to less polluting energy sources -- even if those moves are seen as environmentally unattractive, according to foreign media reports.
Steve Douglas, Hardbe's chief financial officer, said at bloomberg's Canadian Fixed Income conference on Wednesday that any credible forecast suggests copper will face a structural deficit of five to seven million tonnes over the next three to four years. Without copper, however, no energy conversion would be possible, he said.
"Tables are being drawn up at least for the metals that will help decarbonize the world," Douglas said. . "You're going to have to stimulate or allow the creation of a lot of extractive industries that are going to get the environmental scarlet letter -- without it, you're not going to decarbonize the world."
As investors increasingly value the environmental credentials of metal producers, the ability to build mines in the world of extractive resources is becoming increasingly challenging, while social issues, including dealing with local communities, are also of concern. This adds to industry challenges, including supply disruptions and higher raw material costs.
Daniella Dimitrov, chief financial officer of Iamgold, told the panel: "We certainly saw this in some of the commodities that were rising and peaking earlier in the year, such as timber, steel and iron ore, which have since fallen." . "Certainly, that would suggest that the inflation we're seeing is supply-chain driven, it's disruption driven."
Rising costs have hurt toronto-based Iamgold's efforts to build a mine in northern Ontario, Canada.
"We started construction in July 2020, and we are certainly already seeing some of the cost pressures that we just talked about in copper, steel and especially labor," she said. She noted that the impact of Novel Coronavirus-19 on productivity led to higher Labour costs. "We're certainly seeing that in energy, not only in Canada, but in our businesses in South America and Africa."
Shipping, too, has been a problem, and Hardbe has experienced it firsthand.
"We've had a couple of times where we've had to push people to honor contracts because the cost of shipping around the world has just shot up," hardebe's Douglas says. He added that he had heard that global shipping had tripled and quadrupled. Shipping delays have even affected the refurbishment of Hudbay's Snowy Lake plant in Manitoba, Canada.
"Procrastination costs money," he said. "These delays can certainly bog down your work and add additional costs."
