Green technology doesn’t grow on trees. Electric vehicles and EV batteries are built with raw materials that come from the earth. As governments strive to reduce humanity’s carbon footprint, the demand for copper continues to rise. Based on recent exploration results, York Harbour Metals may be positioned to meet that demand.
Energy demand and consumption are in the midst of a paradigm shift. As the United States and other nations around the world move away from fossil fuels, the companies that drill for copper, zinc, and nickel will experience a demand surge and subsequent increase in value. York Harbour Metals (TSXV: YORK) (OTC: YORKF) is experiencing that in 2022.
In mining, the potential yield of a mineral site is determined by drilling holes. York Harbour Metals has done this at their Newfoundland site sixty-eight times since July 2021. They’ve encountered multiple zones of copper- and zinc-rich mineralization with attendant silver and cobalt within the Main Mine Area.
The drilling area is up to 10,764 meters. On top of that, Phase 3 drilling results, based upon the visually observed VMS mineralization, will confirm the earlier drilling results, and extend the drill-indicated mineralization along strike and downdip. That should extend the mining area further, at a time when demand is at an all-time high.
Copper Production Slows in Chile as Global Demand Increases
BHP Group Ltd, one of the world’s largest copper mining companies, recently cut production at their Escondida facility in Chile. They’ve been dealing with labor shortages, a spike in Covid-19 cases, blocked roads, and civil unrest. Copper output for the facility is down 10% this year and is expected to drop even lower. That’s not exclusive to BHP either.
Chile is the world’s largest producer of copper, but that’s expected to change in 2022. The government has several lawsuits pending against mining companies alleging “environmental damages” to the Atacama salt flats. BHP officials, in their recent Q2 financial report, classified Chile as a “challenging operating environment.” Others no doubt feel the same way.
Earlier this year, Statista reported global copper consumption at 24.99 million metric tons and increasing. Some experts believe that demand will soon overwhelm supply, a condition that should send copper prices skyward. The situation in Chile could make that happen even faster. That’s bad news for EV manufacturers with rising materials and manufacturing costs.
Newfoundland Offers Stability for Copper and Zinc Miners
The world’s three largest producers of copper and zinc are Chile, Peru, and China. Chile’s dealing with a Covid-19 surge, labor shortages, and social unrest. Peru just raised taxes on miners and President Castillo is facing impeachment on corruption charges. Doing business with China is unpredictable and their internal demand for copper could consume their supply.
Location is everything. York Harbour Metals is drilling in Newfoundland, a Canadian province that hasn’t seen a new case of Covid-19 since April 2020. There’s no social unrest and Newfoundland led the world in copper production from 1864 to 1917. As the shift to green technology continues, expect them to become a major player once again.
According to Bruce Durham, Chairman of York Harbour Metals, Phase 1 and Phase 2 drilling programs have “successfully identified, delineated, and discovered several copper-rich and zinc-rich mineralization lenses in the Main Mine Zone.” The objective of Phase 3, which is already underway, is to infill the Main Mine Zone and begin expansion of the 400-meter strike length.
Newfoundland has already provided Durham with the permits his company needs. With those in place, York Harbour Metals can aggressively continue their drilling program to further expand along strike and at depth. Unlike their counterparts in Chile and Peru, York’s Canadian operations appear to be full speed ahead for this year and beyond.
The Oil Fields of Yesteryear are Being Replaced by Ore Fields
This story is bigger than just copper production. Lithium and cobalt are required for EV batteries. Solar panels use copper, silicon, silver, and zinc. Wind turbines need iron ore, copper, and aluminum. One hundred years ago, folks needed oil. Miners in Texas, Oklahoma, and California got rich. That was also the time when the former Soviet Union started drilling.
The next hundred years will be all about “green energy metals.” Copper is one of those. York Harbour Metals has mining facilities in a politically friendly and socially stable country. Drilling and mining corporations with South American operations aren’t experiencing that right now. Manufacturers that require copper for green technology can see that.
As the paradigm shift continues, geopolitical conditions will be a factor. Many of the oil fields of yesteryear are in unstable parts of the world. The same can be said for some of the ore fields harvesting green energy materials. Thankfully, York Harbour Metals isn’t one of them. Newfoundland is a great place to live, work, and mine copper.
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