Identity crisis in the copper industry

Most publicity about the copper industry nowadays is focused on the adequacy of ore reserves and on excessive mining capacity. These concerns, stemming from public awareness of actual and potential shortages and oversupplies, relate to production rather than consumption. Perhaps the reason for this one-sided view is that copper is thought of as a commodity which is conspicuously traded in world markets, rather than as one of many industrial materials that serve today's rapidly changing technology. Copper differs from other widely traded commodities in that its real cost of production has progressively increased since World War 11. The reasons for the increase are identifiable by analyzing operations in one of the world's large producing centres, the copper province of Arizona. Another respect in which copper differs from some other commodities is that increases in demand occur less automatically in the case of copper than they tend to in commodities whose consumption is more directly related to population growth. The copper industry's current inability to generate and attract needed investment capital is attributable to these differences between copper and other commodities; it suggests that the concept of copper purely as a commodity is outdated. The key to the problem is better integration between the activities of copper producers and users. Depending on circumstances, integration takes various forms- for example, investment tied to long-term sales con- tracts between producers in developing countries and consumers overseas; common ownership of producing and manufacturing facilities in industrialized nations like the U.S.; and consumer-oriented research and marketing by the copper producers.