Private equity funds are looking to capitalize on gaps in the copper supply pipeline by investing in small-scale mining projects, Pala investments managing partner Stephen Gill told Metal Bulletin.
In an interview during the Cesco Copper Week in Santiago, Chile, Gill said that copper miners face a series of obstacles in bringing large-scale mine supply into production and that a lack of capital expenditure since 2012 has brought about a deficit situation that should come into play next year. This situation provides a prime point of entry for private equity funds, such as Pala, to gain from the potential upside for copper prices by bringing smaller mines into production, Gill said. "Structurally, today is a most interesting time [to be] an investor," said Gill, whose Pala Investments fund is a cornerstone investor in US miner Nevada Copper. Constrained supply pipeline The opportunity for investment funds comes in the shape of a lack of new projects in the copper mining pipeline, since prices peaked at more than $10,000 per tonne in February 2011. Copper...