President and CEO of Yukon-based Western Copper and Gold Paul West-Sells has said that the escalating trade war between the US and China will not affect the value of copper as diminishing supply of the metal will help maintain its value.
The price of copper has slumped by 2.93% to $6,417 per tonne, echoing similar losses of up to 4% for zinc and lead and 1.48% for aluminium as shares in Shanghai lost 1.78% of value. US tariffs of 10% have been levied on $200bn of Chinese goods, but President Trump has said he may target more than $500bn of Chinese imports. West-Sells, however, remains optimistic over the long-term value of copper.
“We have to look at why copper went from $2 to $2.50 to $3 a pound so quickly,” he said. “Certainly you have seen a pickup in demand because of positive global growth, but that didn’t drive copper prices higher. What drove copper prices up 50% was the supply story.”
West-Sells also pointed to long-term stability in the copper market as a cause for optimism. It has been six years since the last copper mine was built and despite the recent slump in the value of the metal, the market is still up 35% from its low in 2016. Western Copper and Gold also boasts significant mineral resources, with proven reserves of 4.5bn pounds of copper and 8.9m ounces of gold.
The company is also expanding its Casino project, found 240 miles north-west of Whitehorse, the capital of Yukon, which is currently in the permitting phase. Should the project be allowed to continue, construction will begin in 2021 and production in 2025. The life is expected to be productive for at least 22 years, and beyond 25 should the mine’s inferred resources of 5.4 billion lbs of copper be accurate.
“We think because of the growing supply deficit this is the perfect time for someone to join us or buy the property,” West-Sells said. “I am starting to see interest in copper companies not seen since 2010. I’m not losing sleep over the copper market just yet.”