SANTIAGO, Chile Anglo American Plc is "very positive" about its medium- to longer-term fundamentals despite the copper market moving into surplus, John MacKenzie, chief executive officer of the miners copper division, said.
"We see ongoing growth in demand, particularly from the industrializing, urbanizing countries like China and others," he said at the Center for Mining and Copper Studies annual Cesco Week in Santiago.
"China today accounts for around 40 percent of world copper demand, and we see it continuing to grow its global copper usage position to approaching 50 percent in 10 years," MacKenzie added. "I think well see a lot more growth coming from the Chinese market, all of which needs to be supplied from projects yet to be developed."
But the company isnt overly concerned about what will happen when Chinese demand eventually declines.
"While you might see rates of growth flattening off, it is growth off a much, much bigger base," MacKenzie said. "So even low levels of growth represent large tonnages of copper requirements in China."
Meanwhile, urbanization and industrialization in developing countries will continue to support growth in copper demand after Chinese consumption starts to fall, he said.
"When China inevitably does start to flatten off, theres no reason to believe why Vietnam, Indonesia and other developing countries like India and Brazil are not going to be following (its growth trajectory)," MacKenzie said. "Not necessarily along the same path as China, because China is a special case, but these nations are going to be growing their intensity of copper use as (gross domestic product) per capita grows."
Africa will also see its demand for copper take off "at some point," he said. "Within Africa, there are a lot of countries that, off a low base, are starting to see very high levels of economic growth and ... will need infrastructure and want appliances."
Demographic changes will also boost demand, with the continents population expected to double to 2 billion people within a few decades, MacKenzie said.
The prospects for North American demand have also improved, he said, noting that London-based Anglo American is "quite encouraged" by the return of growth in the United States as the country "is looking a lot stronger this year."
In contrast, "Europe still seems to be not going anywhere fast," MacKenzie said. "Obviously, (the situation in Europe) is not helped by events in Cyprus, with continued waves of concern each time breaking down confidence that has slowly built up in between. Were not yet seeing any growth in Europe at this stage."