The signs have been evident for more than a year, copper and magnets, both necessary to the production of electricity are becoming more and more sought after and more and more valuable.
Mr. Danne and thousands of explorers like him are the bedrock of a global mining industry struggling to keep up with booming demand. As demand soars in China and other emerging economies, the world is clamoring for minerals and metals to build everything from sewer systems to power plants.
That’s putting immense pressure on the geologists, engineers and modern-day Indiana Jones-type explorers who are tasked with finding the next big reserves. Adding to the pressure on Rio Tinto is a takeover bid by BHP Billiton, an Anglo-Australian mining company, valued at $147 billion.
Hold on to those copper pennies they may be worth their weight in gold. Copper will be fought over just like oil…
…invested $250 million to search for new mines in 2006, four times what it spent five years earlier. “The industry underinvested for years,” says Thras Moraitis, executive general manager for strategy at Xstrata. “Now we need to spend more money.”
As with crude oil, most of the accessible reserves, where the minerals are close to the surface and relatively easy to extract, have already been found. The remaining reserves are deeper in the ground and more expensive to extract. They are often in politically unstable countries, or countries where the infrastructure is old or inadequate. Power outages in parts of Russia, Africa and South America routinely interrupt the discovery and flow of minerals out of the ground and to railroads, ports or factories.
The times, they are a changing…