New Energy Weekly – First Quarter

The first quarter of 2023 is now behind us

And with it came some interesting news. 

To begin, if you bought our researched companies, congratulations. Our open positions are up an average of 12%. Although it’s time to remove Jade Power Trust from our portfolio now. The deal is closed. We did well. Let’s hope we find another couple of those trades this year!

Opportunities in the New Energy space are coming at us fast and furious. Yesterday, Bloomberg reported that the world’s largest copper producer, giant Codelco, came in at the low end of its production guidance. 

Mining companies issue guidance on production volumes to help the market anticipate its revenue and profits. It reduces the volatility of the stock. However, the implication of this giant copper company coming in at the bottom of its range is staggering. And Chairman Maximo Pacheco said the company expects production to stay down through 2024. 

Its peak is definitely in the rear-view mirror. Codelco produced more than 2.0 million metric tons of copper in 2005. Today, it will produce around 1.4 million metric tons. It doesn’t look like it will recover even to its 2021 production levels for four or five years!

As Bloomberg points out in the article, this is a sign of the times for the giant copper producers. These companies have old mines – the 20 largest producing copper mines average age is 60 years. The ore grades are falling, and new deposits are rare. That makes it hard to impossible to grow copper supply enough to meet demand. 
And that’s why I’m so bullish on copper today. And yet the price is just about where it was in 2010:

This is a trend to watch. The data we are getting could easily ignite a big run-in copper stocks – from explorer to producer – in the next 12 months.

We’ll keep you posted.

Sincerely,
Matt Badiali