"In the end, all paper will crash and burn...and those that survive when the smoke has cleared will be the ones that hold hard assets."
Teck thinks no growth in Europe, Decline in America.
This is info from their own corporate presentation. The war is on , it,s all about who can grab the low hanging fruit first. That's what Schaft Creek is... a low hanging fruit. Teck has first pick.
COPPER
* The cost of mining copper is on the rise, up 232% since 2000, with the rise of the byproduct credits (gold, silver, moly) cost of mining is up 130% since 2000.
* 90th percentile cost estimate for 2011 is at $1.90 a pound....up from $0.65 a pound in 2000
* Average C1 cash cost of production is $1.14 / lb , up from $0.49 / lb in 2000 (Remember CUU 2008 cost is NEGATIVE 32 cents / lb)
* Capex per tonne is increasing.....yet CUU is saynig it will go down or stay the same as in 2008.
* Since 2003 Prodction projections decreasing and disruptions are continuing ...6-8% a year of loss. They are lossing 1 million tonnes a year of copper.
* Chinese copper Imports are trending up since 2004, up from 200 thousand tonnes to 600 thousand tonnes.
DEMAND
* Keep in mind that Copper wire rod production makes up 55% of the global demand.
* Chinese wire rod production will grow an average 8% to 2016 based just only currently planned wire production plans.
* 4 new wire rod mills are planned to come on stream next year in China adding 1.1 Million tonnes copper capacity
TECK expectation:
- Decline in America
- No growth in Europe
- Strong Growth in the Middle East and Africa
- Strong growth in India, Thailand and othe parts of developing Asia
CHINESE CLEAN COPPER DEMAND (5 year plan)
* Chinese to invest 11.1 Trillion in the power industry in the next 10 years
- 5.3 Trillion 2011-2015
- 2.75 Trillion in new power plants
- 2.55 Trillion in new power grid construction
* China wants to link all cities over 500,000 population , by increasing high speed rail by 45 000 km
* China to invest 95 BILLION by 2020 in electric car infrastructure
- Plans to sell 1 million EVs by 2020 and have 40 million new nergy vehicules on teh road by 2030
New markets require new projects...and the mine supply is not keeping up with the metal demand.
MAJOR NEW PRODUCTION REQUIRED BY 2020
Per Teck...45 new projects are required at 150 Ktpa....onlt 30 exist today.
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So Teck has access to 75% of the world class Schaft Creek for almost nothing
* (120-180 Ktpa), negative cost production, clean, no environmental issues, in Canada.
.......do you really think they will ignore it lol.. Well that decision must be made real soon.
