Copper exploration woes seen stoking metal rebound

(In U.S. dollars)

By Cameron French

TORONTO, March 1 (Reuters) - Exploration companies at the world's largest annual mining conference were told on Sunday that their failure to uncover top-notch copper deposits could end up being the salvation of current producers, which have been hit by the sharp fall in the metal's price.

The dearth of major copper mines set to come on line in the next couple of years should help support a rebound in the metal's price next year, Sanford Bernstein analyst Andrew Keen told the Prospectors and Developers conference in Toronto.

"It's in many ways a failure of the industry that it still lacks a wave of greenfield projects or brownfield expansions after four years of booming copper prices," he told a room packed with investors, bankers, explorers and analysts.

After trading in the $3-$4 a pound range for much of 2006-2008, copper prices fell off a cliff late last year as a global economic slowdown sapped demand for industrial products.

Spot copper MCU0 was trading just above $1.50 a pound on Sunday. The decline has prompted miners like Freeport-McMoRan (FCX.N) and Boliden (BOL.ST) to cut copper production at certain operations, although output cuts have not been as severe as in the more hard-hit nickel and zinc industries.

While copper producers enjoyed rich cashflows before the price collapse, there have been few major recent discoveries.

Also, some notable deposits that have been uncovered have faced development delays due to slow permitting, disputes with local governments or because of soaring development costs.