The Top Commodity For The Long Haul
Trade wars are not sustainable and you should be using the current weakness in copper prices to initiate or increase positions in your favorite explorers.
That’s the advice I’ve been giving subscribers over the past several months and, like clockwork, copper has surged near the $3/lb. level on news that "substantial progress" in trade talks was made over the weekend, along with Trump announcing he would delay the planned tariff hike on March 1.
I’ve also explained that 2018 was a year that saw few disruptions from the supply side and that I expected that to change in 2019.
There are signs of supply disruptions already as Chinese miner MMG Ltd said it will have to delay some shipments of copper concentrate from Matarani Port due to a blockade by an indigenous community of a road used to transport copper from the Las Bambas mine.
On the demand side, copper and the juniors exploring for it are the best ways to play the mega-trend that is the electrification of everything.
Renewables require many more times the amount of copper than traditional energy sources.
McKinsey Energy Insights Global Energy Perspective 2019 reported in January that by 2035, renewable energy will account for more than half of all power generation. Half.
Here at home near Austin, TX, we recently installed solar panels that offset 70% of our energy use.
The panels have a 30-year warranty, pay for themselves in 10 years, and after the initial 10 years, I’ll save approximately 70% off my current utility bill for at least another 20 years all while generating clean energy.
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McKinsey also believes that in 30 years, three quarters of total energy consumed around the world will come from renewables with the bulk of that coming from wind and solar.
Electric vehicles consume three to four times as much of the metal as those powered by traditional internal combustion engines.
People like me installing solar panels — a choice — is very different than the situation in China where EVs and renewables are seen as ways to help offset the rampant pollution.
Pollution that is being seen as a national emergency.
China will soon be banning the production of most polluting diesel engines.
By 2025, China will account for approximately 50% of all EV sales.
It’s no coincidence that Tesla CEO Elon Musk is betting big on China as federal and local incentives for electric vehicle makers, and subsidies for people who buy the cars in China, provide support for both the sellers and the buyers of EVs.
You already know I believe uranium will be an incredible story — especially in the second half of this year.
I like lithium. I like gold for different reasons as well, but if I had to place one bet on one commodity and go to sleep for 15 years, I would bet on copper and leverage my bet by picking a handful of copper explorers.
To your wealth,
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.
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