Rio Tinto, the world's third-largest mining company, is expecting copper prices will continue to surge as demand increases. Copper traded in London has risen 52% in the past year due to a pickup in global economic activity. Rio Tinto is expecting the copper shortage seen last year will increase this year and next year.
The global copper supply deficit will reach 822,000 metric tons in 2011, more than double last year's shortfall, Bloomberg News reported, citing Barclays Capital. JPMorgan and Macquarie Bank are also among the banks forecasting copper shortfalls in 2011.
Rio Tinto (RIO), also the world's second-largest iron ore producer, said it will take a while for supply from new copper mines to come online and ease supply concerns. The company is looking to expand or develop new projects in Australia, Mongolia, and North and South America, Bloomberg reported.
Last week, the company posted a record full-year profit of $14.3 billion for 2010 amid rising commodities prices. Rio Tinto also boosted its dividend and announced a $5 billion share repurchase plan.