Gold and copper are two of the most popular asset classes among commodities. Gold is often viewed as a safe-haven asset, and during periods of heightened economic uncertainty or inflation, investors may be more inclined to purchase gold in order to maintain the value of their wealth. By contrast, if strong global economic growth is expected, then demand and prices for copper are usually expected to rise.
Warwick Smith, chief executive officer of American Pacific Mining Corp, said in a recent interview with Kitco News that while gold has seen increased interest after hitting all-time highs, copper is expected to be in the spotlight in the coming years because supply issues are still significant.
Smith noted that the demand for copper in this roaring green revolution globally is going to be huge, but the market has not realized it yet. It’s a green energy revolution led by copper. As the trend towards electrification continues to grow, current mine production simply won’t be able to meet the future needs for this base metal. “If you want to be carbon neutral by 2050, you have to triple the copper production that has been going on since the beginning of time over the next 20 years or so. The demand for copper is incredibly high.”
American Pacific is currently working with Rio Tinto to develop its flagship Madison copper-gold project in Montana. Rio Tinto is looking to invest $30 million in exploration. The company also owns the Ziggurat gold-silver project in Nevada.
The mining industry is struggling in 2023 due to low commodity prices, but Smith noted that the market will improve this year and higher prices will make the market less risky, making it more attractive for junior exploration companies. Another factor likely to drive investors into the market is increased M&A activity, which is expected to be strong over the next few years. Many companies have great projects but lack the capital to drill or appraise them, and these projects are ripe for buying.
