Two More Copper Stocks

Rising demand, constrained supplies, (eventually) surging prices

Copper’s long-term story keeps getting better. As Bloomberg recently reported:

Copper Mine Flashes Warning of ‘Huge Crisis’ for World Supply

Oyu Tolgoi, in southern Mongolia just north of the Chinese border, is key to Rio Tinto’s efforts to move beyond its dependence on iron ore and expand in copper, the metal that underpins the clean energy transition. It’s also a vast deposit whose corporate, political and technical vicissitudes offer a glimpse of the red metal’s troubled future.

As demand for copper surges, supply is increasingly likely to come from mines like this one on the arid steppe: expensive, technically complex, outside traditional copper jurisdictions and operating under the eye of governments jealously guarding their natural resources….

Analysts at Wood Mackenzie estimate a greener world will be short about six million tons of copper by next decade, meaning 12 new Oyu Tolgois need to come online within that period. But they aren’t — there are simply not enough new mines, much less enough large ones. The result is a gap: BloombergNEF estimates appetite for refined copper will grow by 53% by 2040, but mine supply will climb only 16%. The world’s largest miners aren’t standing idly by. After more than a decade of repenting for the excess that followed the China-led boom in demand in the 2000s, deals are back, with green metals in buyers’ sights.

So … despite the fact that the world is tipping into a recession or something worse, and copper demand is partially cyclical, it’s hard to resist adding another couple of copper stocks to our portfolio. Today’s picks are a small-cap copper miner ETF that offers quick exposure to a hard-to-analyze part of the industry, and a blue-chip giant that every resource investor should know. Beginning with the former: