Is the World Turning to Copper?
The short answer is, well, it looks like it is! Copper is quickly replacing oil in the most-used material list globally. The specific properties of copper make it the perfect candidate for a lot of different industries. The world is going towards being more electrically powered than oil-powered, and with the limited amount of copper that exists on Earth, the supply starts to deplete, and the price and demand for copper will go up.
This is why investing in copper mining companies at this time can be quite appealing to many. The price of copper has reached its highest point in the past decade, and analysts believe that this price will continue to go up. The increase in the price of copper is due to its applications in various industries, some of which are new industries that are just making their foothold in the industry and economy.
What are the major applications of copper?
Power Industry
First and foremost, copper is sought after for its electrical conductivity. As mentioned earlier, the world is moving towards electrically powered cities, transportation, etc., than oil-powered ones. Houses, roads, factories, and hospitals use massive amounts of electricity. The more electricity is used to power the future cities, the more copper is used for the living.
The common uses of copper include pumps, electrical appliances for homes, computers, entertainment systems, and, most importantly, electric cars. Electric cars are becoming more popular with users and manufacturers every day. According to data from the major car manufacturers worldwide, electric vehicles use 50% more copper than conventional books.
Semiconductors
Semiconductor or microchips is one of the fastest-growing industries around the globe. In fact, the more technology advances, the more microchips the world needs. Microchips were initially designed to use aluminum as their interconnectors. However, since copper is more conductive and has less resistance, it replaced aluminum in the manufacture of semiconductors.
Today, more than 2 billion dollars worth of copper is used for the manufacture of microchips. This amount is only expected to grow as more microchips are needed to run the world.
Energy industry
One of the common uses of copper is in condensers and cooling systems. Modern cooling systems use copper tubing in their manufacture. Copper’s resistance to corrosion makes it the perfect material to use on oil drilling sites and piping. Additionally, copper ions are used in water purification systems because of their disinfection properties.
Rocket science
Finally, copper plays a crucial role in the design and manufacture of space rockets. NASA relies heavily on copper and copper alloys for conducting its space missions. One of the most common uses of copper in space flights is in the colling system. During the flight, the engines create tremendous amounts of heat. Therefore, the cooling system is vital for keeping the integrity of the machine during the flight.
What’s more, the lining of the chambers of the main engines is made of a copper-silver alloy. This alloy is required to resist a temperature of over 6000 degrees Fahrenheit during the flight. Also, the engine and its main chamber are supposed to keep their structure undamaged for multiple uses.
Which copper mining companies to invest in?
Rio Tinto (RIO)
Rio Tinto has over 47,500 employees from 35 countries all over the world. This company specializes in mining iron, copper, aluminum, cobalt, gold, titanium dioxide, and diamonds from various locations globally. In 2018, this company became the first mining company to stop producing fossil fuels, including coal.
Rio Tinto is a mining company that uses top-of-the-line robots in various sizes and with different purposes in its mining ventures. This company was founded in 1873 and is headquartered in London, UK.
In 2020, Rio Tinto had a revenue of 44.6 billion dollars from gross sales. Unfortunately, this was not a record high for this company. In addition, the sales for this company decreased because of the global pandemic of COVID-19. However, in 2011, the revenue for this company reached 65,298 billion dollars which was a record high. The stock for this company currently trades for $90.63 per share.
Southern Copper Corporation (SCCO)
Southern Copper Corporation mines and refines copper from countries such as Peru, Mexico, Argentina, Ecuador, and Chile. This company also focuses on refining anode copper to produce copper cathodes. Other focuses on Southern Copper Corporation include silver, gold, and other materials, mining and processing zinc and lead.
Southern Copper Corporation had a revenue of 7.1 billion dollars in 2020 in sales. It currently has 13,899 employees in its various locations. The stock for Southern Copper Corporation trades at $78.35 per share. In the current quarter of 2021, the company experienced a 200% growth in its stock price. Analysts believe that the stock for Southern Copper Corporation will grow by 12.06% per year in the next five years.
Newmont Corporation (NEM)
Newmont Corporation’s primary focus is on gold. In fact, this company is known as the leading gold company in the world. However, it also mines silver, copper, zinc, and lead. Newmont Corporation was founded in 1921 and has been publicly traded since 1925.
Newmont Corporation is based in the United States. It also has assets and operations in several other countries, including United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana. In 2020, the company was awarded as the top mining company on FORTUNE’s world’s most admired company.
In the current year, 2021, Newmont Corporation is estimated to have 13.13 billion dollars of revenue in sales. The stock for Newmont Corporation currently trades at $74 per share. This price has experienced a 140% increase in the current quarter. According to predictions, the stock for Newmont Corporation will grow by 3% per year in the next five years.
How large is the market for Copper mining, and how is it affected by COVID-19?
Analysts believe that the market size for copper mining is expected to grow from $1641.67 billion in 2020 to $1845.55 billion in 2021. The small amount of growth in the copper mining market is mainly due to the COVID-19 pandemic. Over 60% of the copper in the world is mined in Peru and its neighboring companies. The mines in these countries decided to reduce their production levels to a large scale in order to protect their workers from the pandemic. According to predictions, the market for copper mining will experience considerable growth after the pandemic crisis is over, and most of the people in the world have been vaccinated.
