By Andrea Hotter LONDON -(MarketWatch)- The world hasn't started to run out of copper, but there has been a significant rise in structural rates of demand that has created soaring metal prices and boosted investment into the sector, a senior analyst at HSBC Securities said Tuesday. Andrew Keen, HSBC's head of EMEA metals and mining equity research, said that copper demand growth has grown from 2% a year to between 4-5% annually, although he didn't specify a time frame. "The lead time for new investment is 15 years, so you can see that this structural change in demand growth has created a huge surge in pricing and investment," he told HSBC's Chile conference in London. "This is nothing unusual--China's metals consumption is following a very well-worn demand path." Mining firms are expanding their capital expenditure budgets accordingly, Keen told delegates, with the four London-listed mining majors--Xstrata PLC (XTA.LN), Anglo American PLC (AAL.LN) Rio Tinto PLC RIO +0.56% and BHP Billiton PLC BHP +0.25% -- accounting for nearly $40 billion in investment. "But they aren't getting much more for their money," Keen said, noting that current capex costs are about 50% higher than historical levels. Keen said that copper has had an "exceptionally good crisis," with the market faring much better than other metals like zinc and aluminum during the economic downturn. Since prices slumped during the 2008 financial crisis, copper on the London Metal Exchange has more than trebled in price, peaking earlier this year above $10,000 a metric ton and remaining near historical highs since then. This is because the copper industry has seen relatively low inventories, unlike several other metals, and the industry hasn't been able to quickly respond to lower stocks and rising demand. "There are constant debates in the financial community over the price of copper, but it is certainly a market in very strong underlying health," Keen said.

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