IKN

Once upon an IKN, the end of every year saw this humble corner of cyberspace running a tongue-in-cheek annual predictions list. We’d cobble together some semi-serious forecasts with a couple of oddball ideas on the mining market, politics and even sports events, then score it out of ten at the end of the year. But that was then, this is now and for 2022 we get serious so, while we like silver for the year ahead the real deals in 2022 are to be found in Southern Cone copper. Your three calls in bullet points and yes, you can hold me to these:

• This desk expects silver to out-perform gold in 2022, with the Jekyll & Hyde metal trading up to U$28/oz and finding a steady range around U$25/oz next year while gold remains largely unchanged. All the same, copper will beat them both. Expect plenty of headlines when the world’s most important non-ferrous breaks U$5.00/lb, as just like every year forecasts of over-supply come to nothing while demand moves up through the gears. The difference will be the effect, China’s jawboning down of the metal is coming to an end and, unlike gold, copper will ride the inflation wave.

• Now that the post-election knee-jerk selling is mostly done, Chile is a great buy at these levels. Stop The Stupid about the country falling to Commies, currently being screamed by people who couldn’t find Valpo on a map and think South America is one big country with Rio as its capital. No LatAm country is a smooth ride and yes, Chile’s Constitutional Assembly will be big local news but for the rest of us It’s The Economy, Stupid and as Chile is the only major country with windfall taxes on metals production, its bonanza copper revenues will soon trump any ideological handwringing. The only difference is that they don’t say “Windfall” in Chile to scare you off, it just goes under the name “Codelco” to make it sound politically correct and acceptable. You seriously think a lefty will mess with that? Generalists should look no further than the Chile stock market index ETF for a great bet, ECH at U$21.52 will do well. Meanwhile we mining nuts can take our pick as, with the caveat of staying away from environmentally controversial projects (Dominga, Pascua Lama etc) they’re all going up from here.

• However, 2022’s most fashionable LatAm mining country will be Argentina so goodbye Ecuador, you’re so last year. Expect a full court press from The Basket Case Country and the Alberto Fernández government on mining. It won’t be country-wide, but Argentina’s “friendly provinces” are set to open their doors wide while the national government offers attractive new packages for FDI, promising stability and financial breaks in exchange for hard dollars. Lundin leads, the rest follow.