Chariot Resources Ltd (CHD)

[sumisu]

CHINA IS THE ANSWER

"Speaking of copper, this base metal has seen global demand quickly escalate in recent years. I wrote an essay on copper last fall analyzing its fundamentals while taking a look at its strategic trend as it continues to exceed all-time highs. Lending to this is the fact that yet again in 2005 global copper production was unable to meet demand. This is despite an estimated 3% growth in production for the year.

China’s voracious appetite for the metal has largely contributed to copper’s economic imbalance. This caused warehoused stockpiles around the world to fall alarmingly low throughout 2005 as overall inventories continue their sharp downward trends as they are gutted to supplement this rising demand.

Some industry experts, such as metals pioneer Ross Beaty, believe we may actually be approaching a Hubbert’s Peak for copper. Mr. Beaty cites many examples to support this theory including the fact that many of the large global copper mines have not only reached their threshold for expansion but will be exhausted in the next five to ten years. In addition to this he claims that only 56 new copper discoveries have been made in the last 30 years. This is hardly sufficient to keep up with growing global demand of which 2006 estimates are expected to exceed 17 million metric tons according to the International Copper Study Group.

Mr. Beaty also predicts that Chile copper production, which generates over one-third of all global mined copper annually, will reach its peak production in 2008. The famous Escondida and Chuquicamata mines in Chile together produce nearly 10% of global mined copper. When large mines like these exhaust their resources someday the only way to continue to keep up with global demand will be not only to mine lower-grade ore deposits but to make further major discoveries. The only way to encourage miners to make these discoveries and to sink more capital into mining will be for copper prices to continue to rise.

Mr. Beaty also brings up another excellent point that in addition to all of copper’s current industrial uses, the energy problems of the world will only add to its demand. Hybrid vehicles require four times as much copper as regular vehicles and alternative energy infrastructure requires significant amounts of copper to construct."

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