Copper to ascend in 2021

BHP’s Oak Dam exploration program has received environmental approval from the South Australian Government.

Copper has been forecast to outdo the performance of other mining commodities this year, according to a White & Case 2021 survey.

The survey found that 36 per cent of respondents expect copper to outperform other commodities, including gold (18 per cent), lithium (14 per cent) and nickel (12 per cent).

Last year, copper reached its highest price in seven years due to fears that it would enter a deficit.

“As prices surged, input costs fell, creating the biggest margins for miners in years,” White & Case stated in its Mining & Metals 2021 report.

According to the law firm, copper’s use in electric vehicles and green technologies has also led to further demand, with demand in China reaching record highs in 2020.

The survey also found that gold deals will continue to surge in 2021, with over 40 per cent of respondents expecting precious metals to see more mergers and acquisitions (M&A), which nearly doubled the votes that base metals received.

“Still, while our respondents expect deals, they are split on the outlook for bullion this year,” White & Case stated.

The survey results indicate that large M&A are unlikely to occur outside of gold.

Gold polled the second highest votes as the commodity that was expected to outperform in 2021, however it was also the second-highest voted commodity to underperform.

“Nearly half of respondents said they expected M&A to be opportunistic and focussed on assets, rather than the big transformational deals that have reshaped the sector in the past,” White & Case stated.

A total of 45.4 per cent of respondents considered environmental, social and governance issues as the key risk for the mining sector in 2021.

“The forced departure of Rio Tinto’s (chief executive) and other executives after the destruction of two ancient Aboriginal heritage sites also showed that this is an issue bigger than just climate change and pollution,” White & Case stated.

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