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The Wall Street Journal reported that a number of copper miners, including major miner Freeport-McMoRan (NYSE:FCX) are feeling pressure due to water scarcity and high water costs.
The Wall Street Journal reported that a number of copper miners, including major miner Freeport-McMoRan (NYSE:FCX) are feeling pressure due to water scarcity and high water costs. According to the journal, water supplies are a problem for many miners working in remote areas. However, since copper is found in traditionally dry places such as Chile and Peru, the issue is hitting the red metal especially hard.
As quoted in the publication:
Water management costs are adding to pressure on copper miners amid a slide in prices—down 32% since highs reached in 2011—deflated by weaker demand, especially in China. But at about $3 a pound, prices are still higher than Freeport’s extraction costs in North America of $1.87 a pound, and up from prices that hovered around $1.50 a pound in the 1990s. Analysts say copper prices are relatively resilient, because quality deposits are limited and the metal is essential to a wide variety of goods, from water pipes to iPhones. Analysts say Freeport isn’t at risk of having to close mines for lack of water, but having to increase spending on water could drive up miners’ costs.
