The global copper mining industry plays an essential role in the global economy by supplying raw materials with a wide range of uses. Junior copper mining companies are a major part of this industry, and their impact is felt far beyond the mining sites. From the workers employed at the mines to the impact of copper on global markets and investment opportunities, the influence of junior copper mining companies can be felt around the world.
Supply and Demand
The first major area junior mining companies influence is the present and future copper supply. Copper demand is increasing as the world population rises and more people need access to electricity and electronic devices. Junior copper mining companies are essential in meeting this rising demand, as they provide the future supply needed to manufacture these products.
New projects such as Solaris Resources’ (TSX:SLS) (OTCQB:SLSSF) Warintza Project or ATEX Resources’ Valeriano project in Chile highlight the importance of new high-grade discoveries and what it means for the industry’s forthcoming period of open-ended copper deficits. Solaris Resource has defined a large 1.5Bt copper inventory in an open pit with a low strip ratio at the Warintza project in southeastern Ecuador, and within that a high-grade starter pit driving really robust economics, which makes it one of the best greenfield development copper opportunities available globally.
The project is so important, that the company recently signed an Investment Contract or investment stability agreement with the government of Ecuador that freezes in place the regulatory and fiscal framework for the project as it strides towards project permitting completion in 2024. The contract includes protections related to the prohibitions of all forms of confiscation, non-discriminatory treatment, legal security, and tax stability. This important contract also highlights the project’s importance to local communities, another reason junior mining companies are critical.
At ATEX’s Valeriano Project, the company is exploring an advanced-stage deposit, with large upside exploration potential. The porphyry deposit intersection of 0.714% CuEq over 1,194m is also ranked among the top ten intersections of the last ten years including those of Regulus Resources, Solaris Resources, and Aldebaran Resources.
Each of these mining companies is working on projects which hold further potential for high-grade discoveries requiring further exploration initiatives. As they do so, they open up new work and investment opportunities that otherwise would not have been made available.
Local Economic Impact
Junior copper mining companies don’t just return shareholder value in the form of dividends and share price appreciation. They also bring jobs and wealth to local communities. This is especially true in developing countries or regions where the copper industry is the primary source of employment. Junior copper mining companies help to create jobs for local residents, which can help to reduce poverty levels and improve the quality of life.
Junior copper mining companies also have a positive impact on the local economy. In addition to creating jobs, they often invest in infrastructure projects such as roads and bridges. This helps to improve transportation and communication in the area and can also encourage economic growth.
A Source of Innovation
The mining industry is an entrenched and traditional industry, but junior copper mining companies are often the source of innovative new technologies and approaches. Many of the technologies that have revolutionized the industry, such as green mining, have come from junior companies. Because they are smaller and more nimble, they can often be early adopters of new technologies, leading the way for other companies to follow.
Global Investment Opportunities
Finally, junior copper mining companies create lucrative investment opportunities for global investors. Copper is a valuable commodity, and junior copper mining companies often represent a great way to gain exposure to this commodity without the risks associated with major mining companies. Investors can buy shares of these companies on the stock market, or they can invest in the companies through mutual funds or exchange-traded funds.
While junior mining companies have the word “junior” in their description, their impact is outsized, with global reach and consequences. The recently passed Inflation Reduction Act in the United States, which will boost investment in renewables, and will likely increase demand for copper and benefit junior copper mining companies.
As supply continues to be tight, it will be the juniors with new discoveries that have the biggest global impact in the years to come. This impact will be felt from the local communities near their mines to the global investment markets.