* Sees deficit earlier than in previous remarks
* Few major new projects over next three to five years
* Could be 'substantial supply gap' early next decade
SANTIAGO, April 2 The copper market is likely to
see a small shortage as early as this year because of a lack of
new supply and the removal of up to 800,000 tonnes over the past
18 months in response to modest prices, Rio Tinto's copper and
diamonds chief will say on Tuesday.
A Reuters survey in January showed the copper market was
expected to be in a surplus of about 80,000 tonnes this year and
But Arnaud Soirat, chief executive of Copper & Diamonds for
Rio Tinto , will take a more bullish view,
according to excerpts of a speech seen by Reuters that he will
deliver to the CRU World Copper Conference in Santiago on
"We've seen the copper market rebalance in response to lower
prices," he says.
"In the last 18 months the industry has seen around
700,000-800,000 tonnes of price-related cutbacks and we now see
the market moving into a small deficit this year," he said,
referring to decisions to hold back copper production because it
was not economic to produce it.
After the commodity price crash of 2015, copper's recovery
was less spectacular than for some commodities, such as
coal and zinc.
Copper rose 18 percent last year and has extended gains in
2017, boosted by the impact of strike action that has removed
supply, as well as a lack of new investment.
Rio Tinto CEO Jean-Sebastien Jacques has shifted the
company's focus toward copper, saying the metal has long-term
upside as the world improves electricity grids and electric
vehicles gain market share.
Soirat previously said the copper market would go into
deficit by 2020, just when Rio Tinto's extension to the giant
Oyu Tolgoi copper mine in Mongolia comes onstream.
Before that, few new projects are foreseen.
Soirat refers in Tuesday's speech to "limited new greenfield
projects" over the next three to five years.
"This - combined with grade decline and end of life closures
over the next few years - means we see overall mine supply
potentially plateauing before the end of the decade," he says,
adding there could be "a substantial supply gap" at the start of
the next decade.
(Reporting by Barbara Lewis; Editing by Peter Cooney)