More Strikes Diminish Copper Supply
Slowing production at Grasberg, coupled with a spate of strikes at Freeport's South American mines, has raised concerns of a global copper shortage.
Workers at the Grasberg mining complex run by US giant Freeport-McMoran began a month long strike on September 15, demanding at least an eight-fold increase in the current minimum wage of $1.50 an hour.
Production in the first week of the strike last month was slashed by 230,000 tons a day, representing daily losses of $6.7 million in government revenue.
This will add to a shortfall of more than 600,000 tons, driving December copper prices above $5 a pound, according to Shayne Heffernan of Heffernan Capital Management.
Copper slumped to a 14-month low on Oct. 3 as commodities slid on concern that demand may wane as economies slow. Diego Hernandez, chief executive officer of Codelco, the world's largest copper producer, said the next day that China should take advantage of the slump to restock. In 2008, during the worst global recession since World War II, China's copper demand still jumped 4.9 percent, according to Morgan Stanley.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com