China takes the long view on copper despite soft market – by Niall McGee (Globe and Mail – October 21, 2019)

China is taking the extremely long view on copper. State-owned Chinese firms are making big bets on Canadian copper companies at a time when other investors are backing away amid weak commodity prices and a shaky international geopolitical climate.

Last week, state-owned Chinese miner Jiangxi Copper Co. Ltd. announced it had amassed a 10.8-per-cent stake in Vancouver-based First Quantum Minerals Ltd., through Pangaea Investment Management Ltd. Jiangxi also said it may end up increasing its stake to 16.6 per cent through a share purchase agreement with an unnamed counterparty.

Vancouver-based Ivanhoe Mines Ltd., which is developing the giant Kamoa-Kakula copper resource in the Democratic Republic of Congo (DRC), has attracted two major Chinese backers over the past few years.

CITIC Metal Group Ltd., which first invested in Ivanhoe just more than a year ago, is its biggest shareholder with a 26.4-per-cent stake, and Zijin Mining Group, which got involved in 2015, has a 13.9-per-cent share. (The holdings are contingent on a recent shareholder agreement closing.) Zijin also has a 39.6-per-cent stake in the Kamoa-Kakula project.

The investment by deep-pocketed Chinese investors into two of Canada’s best-known copper companies comes in the midst of a protracted period of weakness for the commodity itself, and a continuing trade war between the United States and China that has scared off the big Western miners from investing in copper.

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