CESCO's Executive Director Juan Carlos Guajardo told Reuters he expected a 200,000 ton deficit this year as supply falls short of demand particularly from top consumer China, adding the mining industry needed coordinated action to ensure future supplies.
Foreign mining firms face growing opposition from politicians, workers unions and indigenous rights groups in host countries seeking a greater share from lucrative mining activity, pushing up mining costs for international companies.
"If the copper market is to be balanced, the industry needs to do things differently and face this challenge," Guajardo said.
"And only this way do I see more chances of getting the projects on time, or else the structural imbalance will continue for many years," he said.
Earlier this month, Indonesia said it would limit foreign ownership of mines to take more profit from its vast mineral resources. Countries such as South Africa, Australia and Canada have also experienced growing resource nationalism.
The trend has forced mining companies to venture into more politically risky territory, including restive parts of Africa. Countries previously seen as too risky, such as Burkina Faso, Congo and Mauritania, are now firmly on their radar.
Guajardo proposes an "integrated approach" for the industry to appease host countries, their workers and communities through steps such as greater involvement in development plans and environmental standards.
He said the industry was also likely to experience more industrial action as workers demand higher compensation for working for global miners.
Strikes last year at Freeport-McMoRan Copper & Gold vast Grasberg in Indonesia cost the company lower production numbers for gold and copper in 2011, and a 60 percent drop in fourth-quarter profit.
Attempts to return the mine to normal have been hampered by protracted disputes between management and unionized workers, as well as by security concerns.
"Workers are part of the stakeholders that are demanding more from these valuable resources so it's very likely we will see more strikes this year which will contribute to the market imbalance," Guajardo said.
"As long as these more sustainable models are not in place, there are more chances we could see unexpected delays and cutbacks and therefore higher prices."
Three-month copper prices on the London Metal Exchange (LME) are up 11 percent so far this year. Prices fell by more than 20 percent in 2011, having hit a record high of $10,190 earlier that year.
Guajardo said his forecast was for copper prices to average at $4.1 a pound (around $9,040 a ton) on tight supplies and healthy demand from China, which consumes 40 percent of the world's copper.
"I am pretty confident that Chinese growth will continue. The government is focused on the development of in-land areas and that is very commodity intensive.
"Regardless of GDP growth numbers, there is still a large amount of commodities that need to be consumed."
Earlier this month, China cut its 2012 growth target to an eight-year low of 7.5 percent. Actual growth in the world's second largest economy has surpassed the government's target in the past years.
A Reuters poll earlier this year showed analysts expect cash copper price to average $8,369 a ton this year, with a market deficit of 101,000 tons in 2012, narrowing to a 12,000 ton deficit in 2013.
Guajardo said he expects a deficit of 200,000 tons this year, and sees the deficit narrowing in 2013. Although he gave no figures, he expects the numbers to show a larger amount than the 12,000 deficit projected in the Reuters poll.
