With the proposed C$470 million sale of Lumina Copper to First Quantum Minerals, Ross Beaty finally closes shop on developing copper companies.
RENO (MINEWEB) – Over a decade ago, this reporter – who does not invest in stocks, and refrains from offering investment advice – was being tutored in the intricacies of financial journalism pertaining to the North American hardrock mining sector by one of the best, brightest and most successful North American gold and silver entrepreneurs.
My mentor at the time, renowned mining entrepreneur Ross Beaty, decided it was time he got into copper. His decision would provide a rare opportunity for a reporter to watch a mining company being born (in this case, actually three copper companies) and, eventually, to watch these companies pass into history.
During a conference call Tuesday, Beaty told analysts he was wistful at the prospect that he would be selling the last of those copper companies – Lumina Copper to First Quantum Minerals for C$470 million.
Back in January 2005, Beaty mesmerized his audience at the Northwest Mining Association convention with his theory that the mining sector may be approaching a “Hubbert’s Peak” for copper production. Globally, economic copper resources were being depleted with the equivalent production of three world-class copper mines being consumed annually; meanwhile, copper demand was increasing by more than 575,000 tons annually and accelerating, he observed.
Beaty also forecast that smelter and refinery bottlenecks would slow copper supplies and keep copper prices high.
A geologist by training, Beaty also predicted during that NWMA talk that low-grade copper deposits would have to be developed internationally to keep up with the soaring demand for that metal. He predicted that copper prices would have to go even higher to make development of these types of deposits feasible.
By January 2008, Beaty would spin off the first of his copper companies, Northern Peru Copper to China’s largest metal traders, China Minmetals and Jiangxi Copper, for US$463 million. In April of that year, Beaty sold his second company, Global Copper Corporation, to Teck Cominco.
However, Beaty hung on to Lumina Copper and its Taca Taca copper-gold-molybdenum project in the Puna Region of northwestern Argentina in the Salta Province. Lumina hoped to sell Taca Taca to a copper producer by 2012.
Then came Argentina’s decision to nationalize oil company YPF in April 2012. “Basically all potential buyers ran away from anything in Argentina,” Beaty told the Financial Post Tuesday.
On Tuesday, Lumina Copper announced it had finally found a buyer for Taca Taca, First Quantum Minerals, which has been rolling along on the acquisition path for some time, most notably a successful hostile takeover of Inmet Mining and its Cobre Panama copper project.
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