Our strategy is to grow responsibly as a base metal mining company, providing superior returns to shareholders. This simple yet comprehensive strategy has delivered excellent results for our shareholders.
1. Long-term responsible growth
We take a disciplined approach to increasing our copper reserves, continually improving our performance as a responsible corporate citizen while we create shareholder value. Creating safe workplaces, engaging with people in the communities where we operate and adhering to high environmental standards are all important to our future.
2. Superior returns
Providing superior returns to our shareholders is a key part of our strategy. We focus on the things we can control: operating effectively, assessing and managing risk to make sure we meet or exceed our production targets, controlling our costs, being good corporate citizens and developing our human resources. This helps us manage the things we cannot control, like metal markets and changes in the world economy.
3. Base metal mining
Our business model focuses on base metals, primarily copper, which we continue to believe is a very attractive business over the long term.
As populations and industries grow, so does the demand for copper. The pace of industrialization, especially in China and India, has kept global demand for copper high over the last decade and is expected to remain high over at least the next five years. Interestingly, metal use in these developing countries is still only a fraction of the intensity in developed nations.
Supply is expected to be constrained by declining production from existing projects, declining ore grades, a limited number of potential new projects and the evolving difficulties in developing them, and restricted access to financing, particularly for junior companies. The supply of new copper production is expected to come mainly from large deposits.
New projects are increasingly more difficult to develop because of their locations, their social context and environmental issues. Developing these projects successfully will require significant investment and resources to deal with lengthy permitting and challenging community engagement processes. This bodes very well for the price of copper in the future, particularly since several copper projects have been cancelled or delayed in response to the downturn in the markets, making it even more uncertain whether the supply of copper will meet growing global demand over the next five to 10 years.
We believe that copper has the best performance profile in the industry, and given our operating expertise and existing portfolio of growth assets, we see no reason to change our focus.