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Copper glut

September 07, 2013

The good news for the world economy is that China’s manufacturing sector is doing OK. China had GDP growth of 7.6% in the first half of 2013. The bad news is that Europe, the US and much of the developing world are mired in low growth. Copper prices have declined from $4.50 in early 2011 to around $3.20 per pound today. 

Credit Suisse commodity analyst Andrew Shaw predicts a further decline to $2.63/lb in 2014.

In the north there is but one operating copper mine: Capstone Mining Corp.‘s Minto mine, an open pit copper-gold-silver mine located 240 kilometres north of Whitehorse in central Yukon. Capstone has noted that its breakeven point is around $2.50/lb. to operate the Minto mine. The mine employs around 350 people all-tolled and has an expected mine life to 2022.

Capstone also has a very promising copper-zinc deposit called Kutcho. It is a high grade copper-zinc-silver-gold development project, located approximately 100 kilometres east of Dease Lake and 330 kilometres north of Smithers in the Liard mining district of north-western British Columbia.

There are several other significant copper deposits being planned for production - one in northern BC, two in Yukon and one in Alaska. Imperial Metals Red Chris mine is under construction in northern BC while the giant Casino project in central Yukon is gearing up for a 3 year permitting application process.


The weak copper price is a reflection of a weak world economy. China, will use 4 percent more copper next year, compared with a gain of 9.1 percent in 2013. China consumes half the world’s copper. Yet new production and weak demand in the non-Chinese part of the world economy are taking their toll on prices. Prices much below $3 can be expected to exact a toll on northern mines/projects in terms of shutdowns/delays.