Freeport-McMoRan, the world's largest publicly traded copper producer, said the copper market, unlike oil, was hampered by a dearth of new copper discoveries and that demand for the metal was set to accelerate for some time as various decarbonisation efforts took hold.
Richard Akerson, Freeport-McMoRan's chief executive, said in an interview on Thursday that while government intervention and market actions may have an impact on the copper market in the short term, the copper business is a very long-term market that is often "exceptionally strong."
"There have been no major discoveries to the copper chain like shale oil has been to the oil industry," he told Bloomberg Television. In the oil industry, there has been a steady stream of new discoveries; Now there is a new element in the oil and gas industry: shale oil. "However, in the copper industrial chain, new discoveries above scale are very rare."
As major economies recover from COVID-19, worries about tight supply in the copper market have repeatedly pushed prices to record highs; The energy transition has also boosted the prospects for copper's use in power utilities. Copper's gains have been tempered by the Fed's macro intervention and by China's efforts to ease surging commodity prices.
Mr Akerson said the copper industry was facing a supply shortage that had required alternatives to copper and increased recycling. Even if copper prices were to double in the near future, he said, freeports would not be able to add new copper supplies for five years.
With copper prices at several near-record levels, Freeport's margins are growing. The company's flagship mines in Indonesia are in the upswing phase and can handle any cost increases. He said the company was "pulling all the strings" to deal with copper supply challenges.
'Host country politicians and unions want a bigger share of the benefits of soaring copper prices,' he said. This is a classic response to high copper prices.
