Many mining companies have simply boosted their reserves when the copper price was rising by rebooking lower grade waste rock as reserves, as the higher price made them economic to mine.
This process has largely come to an end, and there is a distinct lack of new discoveries of the size to deal with the extra demand outlined above.
Many companies have preferred to spend money on share buybacks and buying competitors rather than starting new projects.
There are some great deposits around, but it has become increasingly difficult to get permits and funding for them.
Investors are happy to pay 28 times earnings for Vestas’s shares, the wind turbine-maker, but baulk at being asked to fund a mine that supplies Vestas with the steel and copper it needs.
History shows that when there is a shortage of copper, the price can move very quickly, as it is a metal with no obvious substitute.
Remember copper peaked at $7.50 during the first world war.
Marcus Edwards-Jones is chairman of Phoenix Copper
