China's “Belt and Road” initiative may seem a long way from Mount Isa and North West Queensland both geographically and metaphorically.
But the project may have a direct – and positive – bearing on our economy in the years to come.
The massive infrastructure project, also called the Silk Road Economic Belt or the 21st-century Maritime Silk Road is a development strategy adopted by the Chinese government to link China via land and sea to trading partners across Asia, Europe and Africa.
It has been dubbed "China's Marshall Plan" and this fabulously ambitious initiative requires billions of dollars of spending in the Chinese economy as well as in the countries the “road” will pass through.
So if the Belt and Road initiative looks west from China, how does it affect us here in the opposite direction?
The answer is: copper.
Major player BHP – the world's biggest diversified resources house - is now forecasting that the opening rounds of the initiative will add the equivalent of 7 per cent of 2017 demand.
In its latest episode of BHP's blog on the Belt and Road Initiative, the company predicts China's plan to link the economies of 115 countries through road, rail and port infrastructure will inspire investment of $US1.3 trillion (AUS$1.8 trillion) with $US260 billion of that directed at more that 100 new power projects.
This will add 1.6 million tonnes to copper consumption to 2023 with 70 per cent of that coming directly from power projects.
BHP assesses the Belt and Road is good news for copper in the short term and even better over the long term as economies are transformed by access to new markets for imports, exports and capital.
Rio Tinto has also forecast a world copper supply deficit by 2021-22, hitting a shortfall of three million tonnes by 2025 and being eight million tonnes a year short of supply by 2030.
That date is well beyond the current expected life of Mount Isa Mines copper operation, which is around 2023.
But Glencore will surely be watching developments in the coming years that could give the big stacks a new lease of life – Derek Barry