* Copper price rally has stalled
* Commodity price crash of 2015-16 hobbled investment
* Rio Tinto has huge new copper project in Mongolia
SANTIAGO, April 10 (Reuters) - The copper market will slip into a deficit in the 2020s after being in balance for rest of this decade, as major technological change drives demand for the metal and its byproducts, Rio Tinto’s copper chief said on Tuesday.
Copper prices rose 31 percent last year on the London Metal Exchange, spurred by anticipated demand from China and tight supply.
But this year they have struggled to maintain gains, reflecting the realisation that increased consumption from new technologies such as electric vehicles is still in the future.
Arnaud Soirat, CEO for copper and diamonds at Rio Tinto, said the outlook was still positive.
“Tightening supply and solid demand are combining to produce a positive pricing environment,” he told a copper conference in Santiago.
“We anticipate global market supply and demand will keep close to balance in 2019 and 2020,” adding it would slip into a slight deficit in the 2020s.
Chile, the biggest copper producing country, and the mining industry have a challenge to meet demand, he said, as the world experiences a transition to electric vehicles and a more electrified economy.
“In this transition copper and the co-products it makes possible will be more important than ever,” he said.
Rio Tinto’s comments on Tuesday are broadly in line with earlier predictions it has made that the copper market will be in deficit when Rio Tinto’s extension to its giant Oyu Tolgoi copper mine in Mongolia comes onstream.
Before that, few new projects are foreseen after a collapse in investment following the commodity slump of 2015-16.
Consultancy CRU said on Monday it was not confident there were enough copper projects in the pipeline to meet demand for the metal over the next 16 years as output from existing mines dwindles.
Without new investment, production from existing mines would fall from 20 million tonnes to below 12 million tonnes by 2034, leading to a supply shortfall of more than 15 million tonnes, CRU analyst Hamish Sampson said.
The only way to meet demand would be for every copper project currently in development or being studied for feasibility to be brought into operation, along with most copper discoveries that have not yet reached the evaluation stage, he said. (Reporting by Barbara Lewis and Peter Hobson. Editing by Jane Merriman)
Our Standards: The Thomson Reuters Trust Principles.