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Gold Rush on the Horizon & Copper Tensions Rise: McEwen and Meding Insight

Body of the Article:

In a bid to piece together the apparent puzzle pieces of the resource industry, the views of Rob McEwen, Chief Owner of McEwen Mining, and Rob Meding, CEO of Kincora Copper, offer a unique perspective. Both these industry leaders provide useful insights into the future of the gold sector and the escalating copper crunch.

Rob McEwen, with a storied career in mining, primarily gold, has a reputation for not only predicting key trends but also capitalizing on them. His current focus is on the gold sector, which he expects is on the cusp of an upswing. He believes that a perfect storm is brewing—a combination of dwindling gold reserves, insufficient exploration, geopolitical instability, inflation, and a downswing in gold production. With these factors in play, McEwen believes the sector is poised to move significantly, predicating a surge in gold prices and valuations of gold mining companies.

One of the key drivers behind this price upswing is the gradual shift in the monetary policy of central banks across the globe, with many starting to question the long-held belief in the US Dollar functioning as the global reserve currency. This shift has led to a renewed interest in gold as a safe haven, thereby pushing the demand.

Also, McEwen emphasizes the lack of new discoveries, attributing it to falling research and development budgets in the sphere of exploration. With the world’s gold reserves depleting at a faster pace than being replenished, the gold sector is bound to experience serious upward price pressure.

Moving from gold to copper, Rob Meding’s views present some striking parallels. Meding, the CEO of Kincora Copper, has highlighted an escalating “copper crunch”. This escalating crunch is predominantly due to the increasing global demand for copper, led by the electric vehicle (EV) and renewable energy industries. Both these sectors have a voracious appetite for copper, an essential element in making their products.

Meding points out that existing copper mines are running out of profitable ore, and new deposits are being discovered at a glacial pace, creating a significant copper deficit. Moreover, it takes around seven to ten years to transform a new deposit into a producing mine, hinting at an apparent copper shortage on the horizon.

Yet another compounding factor is the growing emphasis on decarbonization. As countries strive to reduce their carbon footprint, the demand for EVs and renewable energy will continue to soar. Given the critical role copper plays in these sectors, its demand will inevitably sky-rocket in tandem.

Additionally, Meding illustrates the geopolitical dimension of the copper crunch. South America, housing a significant part of the world’s copper reserves, is witnessing rising levels of political instability. This instability has invariably led to supply disruptions and investment uncertainties, further straining the copper supply chain.

In conclusion, both McEwen and Meding, two vastly experienced players in the mining industry, share a common narrative. They envisage a future where resource depletion, escalating demands, and geopolitical issues combine to create a bullish landscape for both gold and copper. These insights offer a unique perspective for investors and industrialists alike, emphasizing the need to navigate carefully through this transformative era in the resource industry.

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