Copper prices will rise behind mining giants' craz

Copper prices are going up? What is the secret behind the crazy "annexation" of the world's major copper mines by mining giants

recently, copper mine trading has become a hot topic. Rio Tinto and other international mining giants have frequently reported that it is not only an indispensable basic production link for a large number of industrial and agricultural products, but also spared no effort to acquire major copper mines around the world at a high price

China is the largest copper consumer in the world, accounting for 40% of the world's copper consumption every year, and has a high degree of external dependence. The impact of the development and change of copper resource pattern on China's domestic market can not be underestimated. It is necessary to grasp the development and change of major mining giants and copper resources from time to time

I. distribution of global copper resources

according to USGS statistics, the world's proven copper reserves are about 720 million tons of metal, mainly distributed in South America and North America, accounting for about 62%

Chile is the largest country with copper reserves of 210 million tons; The reserves of Chile, Australia and Peru account for 53% of the world's total reserves. Chile and Peru account for three of the world's top ten copper mines with production capacity

the copper reserves of the United States, Mexico, China, Russia, Indonesia and Poland are less than those of the above countries, accounting for 4-6% of the total global reserves

II. Special situation of copper production

according to the 2017 production report of major mining companies around the world, the ranking of the top 12 global copper production in 2017 is scheduled

the threshold for entering the top 12 global copper production in 2017 is 450000 tons. The total output of the world's top 12 copper mining companies exceeds 11 million tons, accounting for more than 55% of the global output, indicating that the concentration of copper resources has further improved

in 2017, the total output of the top four global copper companies was 6.25 million tons, including Chile national Copper Corporation (1.84 million tons), but Shenzhen's developed venture capital industry, American Freeport company (1.7 million tons), BHP Billiton (1.45 million tons) and Glencore (1.26 million tons)

the reason why the copper output of the four mining giants accounts for the top four in the world is that each has the "blessing" of world-class good mines

* Chile's national copper company

Chile's national copper company (Codelco) is the largest and most influential enterprise in Chile. It is also the world's largest copper producer and the second largest molybdenum producer

with early government support and inherent advantages, Codelco controls a quarter of the high-quality copper resources in Chile, of which Chuquicamata, andina and elteniente are world-class copper mines

* Freeport is a giant mining company with mining rights for gold, silver and copper mines in the mimega plateau of Papua (West ilian). According to records, Papua has the largest gold reserves in the world, while copper reserves account for the third in the world

Freeport's mine portfolio covers Asia, America and Africa, including the world's largest reserves of Grasberg copper mine in Indonesia, large open-pit copper mines in MORENCI and Safford in the United States, large copper mines in Cerro Verde and El Abra in South America, and world-class tenke fungurume copper mine with great potential in the Democratic Republic of Congo

* BHP Billiton

BHP Billiton (BHP) is a world-famous large multinational enterprise headquartered in Melbourne, Australia. It is a world-famous mining company

its Escondida copper mine has 13.724 billion tons of ore resources and 79.028 million tons of metal; The output of Spence copper mine is 198000 tons, which is also a world-class large mine

* Glencore

Glencore has 150 mines and factories in more than 50 countries around the world, with excellent resource grade. The company estimates that in 2018, the output of copper will be 1.46 million tons, the output of zinc will be 1.09 million tons, the output of coal will be 124 million tons, the output of nickel will be 132000 tons and the output of oil will be 5 million tons

Glencore has two production mines in DRC. One is mutanda copper cobalt mine, which has good resources, large reserves and high grade. Another Katanga copper cobalt ore listed in Canada has a grade of more than 0.5% and good resource conditions

Katanga's production capacity is about 30000 tons/year. Glencore has completed a US $880 million upgrade to the mine after it suspended production in 2015. The mine produced the first batch of cathode copper in December 2017. It is estimated that the copper output of the mine will reach 150000 tons and the cobalt output will reach 11000 tons in 2018, and 300000 tons of copper and 34000 tons of cobalt in 2019

Third, the competition for resources intensifies, and the monopoly pattern is difficult to change in the short term

1. Rio Tinto purchased copper ore at a high premium

in June this year, according to SMM, Rio Tinto wanted copper assets very much, even at a high price. If Rio Tinto cannot independently develop large-scale copper projects, the company is also weighing a series of acquisitions

Rio Tinto is so enthusiastic about developing copper resources because the electric vehicle and renewable energy industries will need a large amount of copper supply in the future

an informed banker also said that Rio Tinto was willing to pay a premium of 30-40% higher than the market value of any target stock for high-quality copper assets

2. Mitsubishi Corporation has invested heavily in the acquisition of

quellaveco copper mine project in Peru, with an annual production capacity of 225000 tons

Anglo American has agreed to a $600 million deal with Mitsubishi. This will increase the Japanese company's stake in the quellaveco copper mine project in Peru to 40%

it is worth noting that quell East Light Company adheres to the concept of people-oriented and common development of enterprises and employees. Evac is a large copper mine project that Anglo American group plans to invest 5 billion in southern Peru. The whole project cycle takes about 4 to 5 years, that is to say, the capital expenditure of this project has not been invested at present, and the production cycle is long. Now, it can be seen that various enterprises are hungry for copper resources

3. Monopoly cannot be changed in the short term

if according to the current frequent mergers and acquisitions and cooperation between giants, the pattern of mining subjects will gradually evolve from mergers and acquisitions between transnational mining giants to the arbitrariness of a huge giant, but this requires the multi-party integration of mining groups and national politics and economy. Therefore, in the short term, the monopoly pattern of mining giants will continue

IV. how should domestic mining enterprises develop

1. Domestic enterprises are moving towards internationalization

the top ten companies in the share of global copper output are mainly Chile national copper company, Freeport McMullen copper and gold company, BHP Billiton group, etc., which are large international mining companies. In contrast, the personnel and scale of domestic enterprises are not the key gap, but the management level and development concept of the company. We should have an international perspective

2. Actively expand the overseas market

at present, among the top 20 copper mines with production capacity in the world, only Las bambas copper mine ranked 7th and Toromocho copper mine ranked 18th belong to Chinese companies. In order to compete for more voice, Chinese enterprises should further expand overseas resources