Copper investments in Asia look attractive and given the pros
Rio Tinto Plc
) stands to cash in on the opportunities.
Copper: Mongolian Growth & Chinese Demand
The Mongolian Government predicts an economic boom, spurred by
the Oyu Tolgoi copper-gold mine that produces gold, silver and
copper worth over $3 billion per year. Meanwhile, in the last
decade (2000-2010), the demand for copper was mostly driven by
China. The issue therefore, begs the question whether indeed China
is the sole demand driver for Mongolian copper.
Indeed, a huge support for Mongolia's growth rests upon its own
wealth of natural resources coupled with its proximity to the
Chinese market, and this is evident from the 12th Five-year plan
for National Economic and Social Development of China.
The report indicated that China is expected to increase its
current annual copper consumption from 5.4 kg per capita to a
massive 10kg per capita in the future, based on the development
projects. Hence, the copper industry will play a large role in
's Oyu Tolgoi Venture
The Mongolian government's joint venture with Ivanhoe (
) and Rio Tinto Plc (
) has targeted the Oyu Tolgoi copper-gold mine in Mongolia to
commence production in the second half of 2012. The analysts find
more prospective resources to be explored and developed in the
area, which is geographically positioned within the larger copper
belt of the
Research Predicts Huge Surge in Copper Demand
The August issue of the metal research reports in US anticipated
world demand for copper - used in power and construction - to reach
20.3 million tons in 2011, helped by stronger-than-anticipated
growth in Europe and the United States. The report predicts a
divergence between Chinese copper demand and production. It also
expects a declining trend in copper production in the coming decade
despite new copper mines emerging.
Tinto and Chinalco JV
With this backdrop, Chinalco Rio Tinto Exploration Co. Ltd (
), the joint venture between Rio Tinto and Chinalco, received a nod
from China's Industrial and Commercial Administration. Both the
parties inked the official JV exploration agreement in June 2011,
which was recently registered in China for exploration of the
country's mineral deposits. Following the approval, CRTX is soon
expected to flag off its business in China with its initial
priority being exploration of copper, and thereafter expanding into
coal and potash.
), over time, has been promoting new geological technologies,
aligning itself with the initiatives of the Ministry of Land and
Resources in China.
Conversely, Rio Tinto Plc is engaged in exploring, mining and
processing of the earth's mineral resources, producing a broad
range of metals and minerals.
The integration of their respective competencies is expected to
develop and enhance China's domestic resources supply capabilities.
Chinalco holds a 51% interest in the JV and Rio Tinto the rest.
Headquartered in London, UK, mining giant Rio Tinto competes
with big banners like
BHP Billiton Ltd
ALUMINUM CP-ADR (
): Free Stock Analysis Report
BHP BILLITN LTD (
): Free Stock Analysis Report