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Copper

Why miners aren’t panicking about the latest commodity drop – Peter Koven (National Post – March 13, 2014)

The National Post is Canada’s second largest national paper.

While steep declines in copper, iron ore and coking coal prices have spooked investors, they are not severe enough to disrupt the mining sector at this stage.

The vast majority of projects can generate decent margins at these price levels, according to experts. Though in the case of coal, there has been enough of a drop to make high-cost producers nervous.

Prices for all three commodities have been under pressure throughout 2014, but they plummeted over the last several days due to economic concerns out of China. Manufacturing activity has been weaker than expected, and a bond default by a solar company raised fears of tighter credit conditions. That hit the copper market in particular, as many Chinese companies use the red metal as collateral to raise money.

Chinese steel mills are also being threatened as the government tightens environmental standards. That is putting pressure on coal and iron ore.

Copper has sunk to near a four-year-low, falling below the psychological barrier of US$3.00 a pound.

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Copper’s freefall is freaking out world markets – by Marc Jones (National Post/Reuters – March 12, 2014)

The National Post is Canada’s second largest national paper.

LONDON — A dizzying fall in copper to a near four-year low compounded increasing concern in China over its economic slowdown on Wednesday to send a wave of unease sweeping through world markets. World shares fell for fourth day, but it was copper, often seen as a proxy for China’s fortunes, that grabbed the headlines as Shanghai futures fell by their 5% daily limit again and benchmark prices of the metal slumped to their lowest since 2010.

In Europe, bourses from London to Lisbon tumbled in early deals and safe-haven German government bonds were in demand as the jitters compounded the geopolitical tug-of-war between Russia and Kiev and the West over Crimea.

“Markets are watching what is happening in copper, with awe and trepidation,” said Societe Generale head of currency strategy Kit Juckes. “It’s partly ongoing concern about Chinese growth (or lack thereof) and nagging worries about the Ukraine. And partly it is just that the commodity bubble burst last year and not everyone noticed.”

Copper’s plunge comes in the wake of China’s first domestic bond default which has sparked concerns about the potential unravelling of loan deals where the industrial metal has been used as collateral.

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HudBay CEO Eyes More Deals Beyond Augusta Bid: Corporate Canada – by Liezel Hill (Bloomberg News – March 11, 2014)

http://www.businessweek.com/

HudBay Minerals Inc. (HBM), the 87-year-old company making a C$334 million ($301 million) hostile bid for a smaller Canadian copper-mine developer, is looking for more acquisitions even if it doesn’t pull off that deal.

HudBay made its all-stock offer on Feb. 9 for Augusta Resource Corp. (AZC), the owner of the Rosemont copper project in Arizona. The bid was 16 percent less than Augusta’s closing price yesterday in Toronto, indicating investors are anticipating a higher offer. That’s also the widest discount for any current Canadian takeover, data compiled by Bloomberg show.

While HudBay recently started up two Canadian mines and is close to completing a new Peruvian operation, it’s not yet clear where growth will come from further in the future, according to Chief Executive Officer David Garofalo. Hudbay is still a few years away from developing a sustainable pipeline, he said in a March 4 interview at Bloomberg’s Toronto office. “We’re ready to move onto other things whether or not we get Rosemont,” he said.

Garofalo, 48, a former chief financial officer at Canadian gold producer Agnico Eagle Mines Ltd., took up his current post in July 2010, more than a year after HudBay abandoned an agreement to buy Canadian competitor Lundin Mining Corp. Garofalo said that when he became CEO, he found the Toronto-based company’s project pipeline was empty, while two of its three mines were nearing the end of their lives.

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‘Dr. Copper’ sinks to eight-month low amid concerns about China – by Peter Koven (National Post – March 11, 2014)

The National Post is Canada’s second largest national paper.

Copper goes by the nickname “Dr. Copper” because history shows the red metal is a leading indicator of the global economy’s health. Unfortunately, it hasn’t been telling us anything good lately.

The red metal has recently been in a swan dive, dropping close to 10% since mid-February and falling steeply in the past couple of trading days. The key futures contract on Monday briefly sunk below US$3 a pound, its lowest level in eight months.

As is usual with commodities, China appears to be the culprit. Investors were spooked by recent Chinese trade data that showed a stunning 18.1% year-over-year drop in exports in February. That left a trade deficit of US$23-billion.

“It was a big number that probably surprised people,” said Kerry Smith, an analyst at Haywood Securities.

There was already a lot of concern in the market about the Chinese economy, particularly after its first-ever corporate bond default last week. But copper, much like China, has shown remarkable resilience in recent years.

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Rejected in 2008, Kemess gold-copper mine proposal on table again – by Wendy Stueck (Globe and Mail – March 10, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — A mine rejected in 2008 on environmental grounds is back in play, with a different company at the helm and plans for an underground, rather than an open-pit, operation.

Toronto-based AuRico Gold filed a project description for the Kemess Underground Mine Project with the B.C. Environmental Assessment Office last month, reviving plans for a gold-copper deposit about 250 kilometres north of Smithers and about 6.5 kilometres north of former producer Kemess South Mine, which was in production from 1988 to 2011.

In the years leading up to Kemess South being depleted, former owner Northgate Minerals made plans to extend operations by developing the nearby Kemess North deposit. Plans at the time called for disposing of tailings and waste rock from expanded operations in Duncan Lake, also known as Amazay Lake.

That plan did not sit well with aboriginal groups that had historic and cultural connections to the lake. In 2007, a federal review panel concluded Kemess North as it was then designed was not in the public interest “because of significant adverse environmental, social and cultural effects, some of which may not emerge until many years after mining operations cease.”

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Copper thieves hit art and buildings in Toronto parks – by Rachel Mendleson (Toronto Star – February 13, 2014)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Incidents at Christie Pits and Art Eggleton Park show the market for stolen copper and bronze remains hot. The half-dozen copper-clad landscape surfaces installed in the late ’90s in Art Eggleton Park were intended to recall Garrison Creek, a now-buried ravine that once flowed through the city.

But in recent months, the public art installation at Harbord and Montrose Sts., dubbed “Memory Banks,” has become a testament to another, somewhat baser, phenomenon: The still-hot market for stolen copper.

Ray Stukas, parks manager for Toronto and East York, said thieves made off with about 200 pounds of copper cladding, apparently ripped from the back of the planter-like installation, sometime late last year. “I suspect (it was) late at night,” Stukas said. “They probably put a pry-bar down through the top, and then they would just leverage it toward them.”

An epidemic that stretches well beyond the city limits, in recent years copper theft has become a big concern, thanks to historically high prices for the metal, currently pegged at about US$3.25 per pound.

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HudBay Low Bid for Arizona Copper Invites Rival Offer: Real M&A – by Tara Lachapelle (Bloomberg News – February 11, 2014)

http://www.businessweek.com/

The prospect of mining copper in Arizona has traders lining up bets that Augusta Resource Corp. (AZC), the target of an unsolicited bid by HudBay Minerals Inc. (HBM), will win a higher offer.

Shares of Vancouver-based Augusta rose 15 percent above HudBay’s all-stock bid, which was valued yesterday at C$2.78 a share, or about C$440 million ($400 million) including net debt. The gap, one of the widest among pending North American deals in which traders expect bidding wars, indicates investors are anticipating a boost from HudBay or another suitor.

Augusta’s Arizona copper project is in the last stages of attaining necessary permits. Laurentian Bank of Canada said it’s large enough to attract other producers including OZ Minerals Ltd. (OZL) and Teck Resources Ltd. (TCK/B) and estimates the company’s value is at least C$3.89 a share based on similar deals. Freeport-McMoRan (FCX:US) Copper & Gold Inc., based in Arizona, is another possible suitor with the financial (FCX:US) strength to outbid HudBay, according to National Bank Financial.

“The market expects that this may be the initial offer and Augusta could negotiate better terms,” Shane Nagle, a Toronto-based analyst at National Bank, said in a phone interview. “It’s a high-quality asset. There is room certainly to sweeten the offer.”

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Peru’s copper sector the one with highest growth potential in the world—Chilean expert – by Cecilia Jamasmie (Mining.com – February 5, 2014)

http://www.mining.com/

It is not usual to hear Chileans praising their Peruvian neighbours, especially when the matter in question is the copper industry, Chile’s most precious resource, which accounts for 60% of the nation’s exports and 20% of its GDP.

But Juan Carlos Guajardo, the Chile’s Centre for Copper and Mining (CESCO) director, told Peruvian newspaper Gestión (in Spanish) that the production gap between the two mining countries is “set to narrow,” as Peruvian copper projects are solid, competitive and less costly in terms of energy needs.

He added that rather than seeing Peru’s copper sector as a threat, Chileans miners should evaluate the many opportunities for cooperation between both industries.

Actually Peru is already looking to boost cooperation agreements on copper processing technology with Chile as the country, the world’s top copper producer, has decades of experience extracting the red metal.

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First Quantum reveals larger copper forecast for Cobre Panama – by Peter Koven (National Post – January 29, 2014)

The National Post is Canada’s second largest national paper.

TORONTO – When First Quantum Minerals Ltd. acquired Inmet Mining Corp. for almost $5-billion early last year, the key rationale is that it expected to find enormous cost savings at Cobre Panama, Inmet’s flagship project and one of the world’s largest undeveloped copper deposits.

On Tuesday, nearly a year later, First Quantum finally released its Cobre Panama projections. The headline number was an eye-opener, as the company’s proposed capital cost of US$6.4-billion is actually higher than the US$6.2-billion that Inmet was talking about. However, First Quantum also plans to produce a lot more copper than Inmet did.

“The re-engineering of the Cobre Panama project has resulted in a very much larger project of substantially lower capital intensity, and with a considered but clearly defined timeline to completion,” President Clive Newall said on a conference call.

Vancouver-based First Quantum plans to churn out a whopping 320,000 tonnes of copper a year at Cobre Panama, roughly 20% more than Inmet proposed. It also expects to produce 100,000 ounces of gold, 1.8 million ounces of silver and 3,500 tonnes of molybdenum per year from the mine.

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Zambia Said to Withhold Up to $500 Million of Mine Refunds (2) – by Matthew Hill (Bloomberg News – January 23, 2014)

http://www.businessweek.com/

Zambia’s government has withheld as much as $500 million in value-added tax repayments from mining companies failing to provide importer documentation, according to two people with knowledge of the matter.

Zambia’s revenue authority is holding back the repayments after last year introducing rules requiring the provision of documents from importers, the people said, asking not to be identified because the matter isn’t public. They said they estimated the amount because they don’t have the exact figures.

Vedanta Resources Plc (VED) and other miners in Africa’s biggest copper producer say they can’t comply with the rules because they sell to commodity traders and don’t know the final destination of their output. The tax authority also stipulated that export revenue must be paid directly to a Zambian bank, while some mining companies are paid via foreign accounts.

Mumbuna Kufekisa, a spokesman for the Zambia Revenue Authority in the capital, Lusaka, declined to comment. Emmanuel Mutati, president of the Chamber of Mines of Zambia, couldn’t immediately comment when called on his mobile phone.

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New Copper Mine Under Construction in Lyon County [Nevada] – Paul Nelson (KTVN.com – January 20, 2014)

KTVN Channel 2 – Reno Tahoe News Weather, Video –

http://www.ktvn.com/

Nevada Copper is in the process of building an underground mine at Pumpkin Hollow – a rural area about 8 miles southeast of downtown Yerington.

“There’s nothing out there. There’s no protected habitat. There’s no environmental issues. It’s a perfect mining situation,” says Lyon County Manager Jeff Page. Once the 2,140 feet deep mine shaft is complete, they will start mining more than one billion pounds of high-grade copper.

“To us, this is like hitting the mother lode. This is amazing,” says Korin Barnes, Nevada Copper project geologist. Equipment will be assembled inside the mine shaft and will remove ore from about 35 miles of tunnels resembling an underground city.

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RPT-INTERVIEW-Chile’s environment lawyers say they’re just warming up – by Alexandra Ulmer and Fabian Cambero (Reuters India – January 20, 2014)

http://in.reuters.com/

SANTIAGO, Jan 17 (Reuters) – Chile’s leading environmental lawyers, who have helped stall around $30 billion in mining and energy projects, say the battle is only just beginning – and copper investments are poised to come under increasing fire this year.

In a significant shift for business-friendly Chile, empowered social groups are successfully suing massive projects over threats to glaciers, health, indigenous rights and biodiversity.

Power projects have so far fared the worse, but Santiago-based lawyers Alvaro Toro and Lorenzo Soto say many communities are now turning up the heat on mining in the world’s top copper producer.

“This year is going to be very conflictive,” Alvaro Toro, a lawyer with environmental NGO OLCA, told Reuters in his tiny office, just a block from the headquarters of world No.1 copper miner, Codelco.

“Projects are increasingly being set up in fragile places. People’s opposition is completely rational,” he said on Friday.

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Striking Miners, and Children Who Paid the Price – by Neil Genzlinger (New York Times – December 16, 2013)

Red Metal: The Copper Country Strike of 1913 from Jonathan B. Silvers on Vimeo.

For more info about this event, click here:  http://1913strike.wordpress.com/

http://www.nytimes.com/

‘Red Metal,’ on PBS, Revisits a 1913 Mining Strike

This has been a year of notable 50th anniversaries, but time didn’t begin in 1963. A sorrowful PBS documentary on Tuesday night notes the 100th anniversary of an event forgotten by much of the country but not by the people of Michigan’s Upper Peninsula: a miners’ strike that led to a catastrophic stampede in which 73 people died, most of them children.

The program, “Red Metal: The Copper Country Strike of 1913,” is fairly generic as documentaries go, but in an age of battles over the minimum wage and concern about the distribution of wealth, it resonates. An organizing effort by the Western Federation of Miners led miners in and around Calumet to strike in July, and the companies (the Calumet and Hecla Mining Company was the biggest) were unyielding.

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[Arizona Copper Mining] America’s Future Depends on Decisions We Make Today – by David F. Briggs (Tucons Citizen – January 05, 2014)

http://tucsoncitizen.com/

David F. Briggs is a resident of Pima county and a geologist, who has intermittently worked as a consultant on the Rosemont Copper project since 2006.

Opponents claim the Rosemont copper project should not be allowed to be developed because most of the copper concentrates produced by this project will be exported for treatment by foreign smelters and refineries. The false premise of their argument is; “if the copper produced from Rosemont is not consumed here, this project will not benefit Americans.”

How many of you know that most of the copper-bearing materials collected at domestic recycling centers are also shipped to foreign facilities for treatment because the United States no longer has the capacity to treat these materials here? During 2011, recyclable materials containing 1,367,000 short tons of copper were exported to foreign countries for treatment. Most of this recyclable material (75.8%) was exported to China.

Should we also stop recycling copper because most of it is also shipped abroad for treatment? Isn’t recycling copper good for the environment?

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Chilean miracle miners back in spotlight (AFP/Sydney Morning Herald – January 2, 2014)

http://www.smh.com.au/

At the bottom of a dank salt mine in Colombia, a 200-strong film crew featuring Spanish actor Antonio Banderas is reconstructing the incredible tale of 33 miners buried alive for 69 days in Chile in 2010. Actors from multiple countries work in suffocating heat on The 33, which traces the unlikely survival of the men trapped deep underground after a collapse at the San Jose copper mine in the Atacama desert.

“It’s not just about the physical ordeal these 33 men went through – it’s about the emotional one, of wondering if they would live or die, or if they would go crazy waiting to find out,” Gregg Brilliant, a spokesman for the American film production, told AFP.

To depict the incredible story that unfolded more than 600m underground, the production team chose to film at two sites outside the Colombian capital Bogota. Behind a security cordon, curious onlookers try to catch a glimpse of a star, but their Hollywood hopes are repeatedly dashed.

In the salt mines of Nemocon, the humid and musty environment combine with the thin mountain air to recreate the oppressive atmosphere at San Jose, located 800km north of Chile’s capital Santiago.

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