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Copper

How SNC-Lavalin’s $260-million contract with Chilean miner fell apart – by Nicolas Van Praet (Globe and Mail – April 8, 2019)

https://www.theglobeandmail.com/

SNC-Lavalin Group Inc. chief executive officer Neil Bruce flew to Chile in late January and came back thinking he had a deal with state miner Codelco to salvage what was left of a US$260-million contract that was behind schedule and going badly. The aim, one insider said, was to make things right. Then Codelco tore up the pact.

“Codelco informed this morning its decision to terminate the contract with SNC-Lavalin early on, due to the serious breach of contractual milestones,” the miner said in a statement on March 25 that outlined its intention to take over the work on two new sulphuric acid plants at its giant Chuquicamata copper mine site.

The problems included construction delays, slow payments to subcontractors and “problems in the quality of the works, among others,” it said. The mining blowup marks a rare operational blunder under Mr. Bruce, who has reshaped SNC-Lavalin over a four-year tenure by widening its geographic footprint and lowering its exposure to riskier fixed-price contracts.

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Copper producers gather; electric cars seen driving demand growth – by Zandi Shabalala and Ernest Scheyder (Reuters U.K. – April 7, 2019)

https://uk.reuters.com/

SANTIAGO (Reuters) – Global copper producers are converging in Chile this week as tightening supply buoys prices, even as the industry grapples with declining ore quality, project delays and worries the U.S-China trade war may hit long-term demand.

Despite these challenges, the industry is planning for substantial growth in the next decade thanks to an expected boom in production of electric vehicles, which use twice as much copper as internal combustion engines. Automakers are vowing to produce all-electric fleets.

With all that in mind, hundreds of investors, executives, analysts and regulators are gathering in Santiago, the Chilean capital, for the annual World Copper Conference.

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Mongolia lawmakers seek to rewrite Oyu Tolgoi deal – by Munkhchimeg Davaasharav (Reuters U.S. – April 4, 2019)

https://www.reuters.com/

ULAANBAATAR, April 5 (Reuters) – A group of Mongolian legislators has recommended one of the agreements underpinning Rio Tinto’s Oyu Tolgoi copper mine should be scrapped and another changed, adding to the giant project’s political problems.

The Gobi desert copper deposit promises to become one of Rio Tinto’s most lucrative properties, but it has been subject to repeated challenges from politicians who argue the spoils of the country’s mining boom are not being evenly shared.

It has also been at the centre of an anti-corruption investigation that has seen the arrest of two former prime ministers and a former finance minister.

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Canadian copper producers on a tear as metal rallies again – by James Snell (Financial Post – April 5, 2019)

https://business.financialpost.com/

Base-metal analysts and tarnished copper miners are optimistic on a potential bull trend in copper amid optimism around U.S.-China trade talks and growing scarcity of the metal that’s offsetting concerns about a Chinese economic slowdown.

Copper hit an all-time high of US$10,190 per ton in 2011, but has been on a roller coaster ever since. The metal, considered a key barometer of the global economy given its various uses, hit a four-year high of US$7,348 last June before plunging to US$5,725 in early January. Since then it has clawed its way back to US$6,426.50 per ton, up 7.7 per cent since the start of the year.

The upturn comes as a relief for the Canadian copper industry, which produces approximately 600,000 tonnes annually — three per cent of global supply. Canadian companies such as Hudbay Minerals Inc. (up 52.61 per cent year-to-date), Imperial Metals Corp. (up 71.88 per cent), Taseko Mines Ltd. (up 10 per cent) and Capstone Mining Corp. (up 6.5 per cent) are among some of the major copper producers riding the latest copper rally.

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Peru govt offers to end emergency measures in copper mine dispute (Reuters U.S. – April 1, 2019)

https://www.reuters.com/

LIMA, April 1 (Reuters) – The Peruvian government has offered to end emergency measures authorizing the use of force in a remote Andean region if indigenous protesters lift their blockades of roads to Chinese miner MMG Ltd’s Las Bambas copper mine, the prime minister said on Monday.

Prime Minister Salvador del Solar pitched the idea to Gregorio Rojas, the leader of indigenous community Fuerabamba, during negotiations on Sunday aimed at restoring road access to Las Bambas, one of Peru’s biggest copper mines, his office said in a statement.

“What we agreed was that first he would see if his community is in agreement. He can’t make decisions today without consulting members of his community,” Solar was quoted saying.

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[Alaska Mining] Pebble project draft study fuels Legislature debate – by Steve Quinn (KTVA.com – April 1, 2019)

https://www.ktva.com/

The merits of a draft environmental impact statement on the proposed Pebble Mine project near Bristol Bay – the headwaters for one of the world’s largest salmon fisheries – are being debated in the state Capitol.

The Pebble Partnership’s 20-year plan for its planned copper mine is under review by the U.S. Army Corps of Engineers. On Monday the House Resources Committee heard from the project’s critics, who say any mine in the area represents a threat to one of the state’s most valuable and abundant renewable resources.

Critics have called the study incomplete with “tenuous assumptions,” and a failure for assuming “no important cumulative risks.” They say it also “dismisses many environmental risks, including the risk of a tailings dam failure,” thereby jeopardizing one of the world’s most prolific sockeye salmon fisheries.

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Rock-throwing protesters repel Peru government negotiators in dispute over Chinese copper mine – by Marco Aquino and Mitra Taj (Reuters U.K. – March 27, 2019)

https://uk.reuters.com/

LIMA (Reuters) – A government negotiating team sent to Peru’s southern copper belt to calm rising tensions at a Chinese-owned mine was repelled by indigenous protesters who hurled rocks at its helicopter on Wednesday, a government official said.

Peruvian President Martin Vizcarra’s government had tasked the team, led by three ministers, with finding a peaceful end to a 51-day road blockade that has choked off access to Chinese miner MMG Ltd’s Las Bambas mine, one of the country’s largest copper producers.

However, protesters used slingshots to hurl rocks at the ministers’ helicopter when it arrived at the blockade, where they had hoped to restart talks with representatives of the indigenous community of Fuerabamba, Development Minister Paola Bustamante, part of the team, said in a televised interview.

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SNC-Lavalin ‘appalled’ and ‘surprised’ as Chilean miner Codelco cancels $260-million contract – by Sandrine Rastello and Laura Millan Lombrana (Bloomberg News/Financial Post – March 26, 2019)

https://business.financialpost.com/

SNC-Lavalin Group Inc., the embattled engineering firm at the heart of Canada’s biggest political crisis in years, has been dealt another blow in Chile.

Copper producer Codelco said Monday that it canceled a contract worth US$260 million to build two new acid plants in the Chuquicamata mine. Montreal-based SNC has “seriously” and “repeatedly” breached aspects of its contracts, according to Codelco, which cited delays in construction and in payments to subcontractors, as well as quality issues.

“Codelco made several attempts to resolve the problems facing the project, with the last attempt in February,” according to the statement from the Santiago-based company.

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Why Rinehart, Forrest, BHP and Newcrest are sweet on Ecuador – by Brad Thompson (Australian Financial Review – March 25, 2019)

https://www.afr.com/

The mining executive who prepared the ground for a tenement tug-of-war between BHP and Newcrest in Ecuador is convinced a lot more copper and gold will be found in the exploration hot spot.

Malcolm Norris, who secured the Cascabel tenement a decade ago while calling the shots at SolGold, said it was no surprise that Andrew Forrest’s Fortescue Metals Group and Gina Rinehart’s Hancock Prospecting had also taken a shine to Ecuador.

Mr Norris, now the chief executive of ASX-listed junior explorer Sunstone Metals and chasing the third major copper-gold discovery of his career, said Cascabel might turn out to be big enough for both BHP and Newcrest. “I think it is a very big system and the resource that have been drilled so far, that’s not the end of the story. There’s more to come, I’m sure,” he said.

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Hudbay’s Rosemont mine pushes ahead despite concerns on water impacts – by Ian Bickis (Canadian Press/Bloomberg News – March 21, 2019)

https://www.bnnbloomberg.ca/

TORONTO — A controversial mine being developed by a Canadian company in Arizona shows the lengths to which the industry will go to feed the world’s unrelenting demand for copper.

Hudbay Minerals Inc. and a previous owner have been pushing to get approval for the Rosemont mine for more than a decade amid local opposition and skepticism from regulators about water issues in the semi-arid region.

To secure approval for the nearly US$2-billion mine the company has proposed numerous measures to reduce impacts on the environment, including what it says is an “unprecedented” use of dry-stack tailings.

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‘Radical’ Foes, Red Tape Hinder Ecuador’s Quest to Become a Mining Superpower – by Laura Millan Lombrana and Stephan Kueffner (Bloomberg News – March 19, 2019)

https://www.bloomberg.com/

Ecuador has tethered its economic fortunes to a burgeoning mining industry. Now it just needs to get bureaucrats and community leaders on board.

Local opposition and red tape are hindering plans to become a mining superpower that can rival other South American nations. Less than two years ago the government hoped mining would become 4 percent of Ecuador’s gross domestic product by the end of President Lenin Moreno’s term in 2021. That’s now under question, according to Deputy Mining Minister Fernando Benalcazar.

“That 4 percent is aggressive, given the conditions of radical social and environmental opposition that we have been seeing,” Benalcazar said in an interview in Quito. “Mining belongs to all 17 million Ecuadorians and large projects can’t be decided by groups of people that don’t represent even one per thousand of the country.”

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Huge demand for copper, cobalt, lithium and nickel in the offing as EV uptake increases – by Tracy Hancock (MiningWeekly.com – March 15, 2019)

http://m.miningweekly.com/

Metals of the Future

Investors focused on the mining sector may not fully appreciate how quickly the electric vehicle (EV) is being adopted globally, in light of the world pursuing a low-carbon emissions future, says battery metals investment vehicle Cobalt 27 Capital chairperson and CEO Anthony Milewski, who warns of a potential deficit in the supply of the metals critical to achieving this future.

Global management consultancy firm McKinsey & Company says 2017 marked the first time EV sales passed the one- million mark, noting in May 2018 that, by 2020, EV producers could be moving 4.5- million units, about 5% of the overall global light-vehicle market.

Even with South Africa’s electricity supply woes, automotive company Jaguar Land Rover South Africa forecast in January that South Africa could have 145 000 EVs on its roads, expecting yearly sales of new EVs to reach 43 000 units in the next six years.

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Column: Funds start buying into the copper recovery story – by Andy Home (Reuters U.K. – March 12, 2019)

https://uk.reuters.com/

LONDON (Reuters) – In a tentative return to Doctor Copper for the money men, investors are starting to buy back into the metal after aggressively shorting the market at the start of the year.

Some of the gloom weighing on the copper price appears to be lifting, with more positive noises from U.S.-China trade talks and expectations that Beijing’s latest stimulus boost will revitalise a flagging manufacturing sector.

Copper’s own micro dynamics, in particular low visible stocks on the world’s three exchanges, are also fanning bullish enthusiasm. Funds increased their net long holdings on the CME copper contract by 7,488 contracts to 23,126 in the week to March 5, a level not seen since the middle of last year.

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SolGold’s Nick Mather our Mining Person of the Year for 2018 – by John Cumming (Northern Miner – February 27, 2019)

Northern Miner

Nicholas Mather, president and CEO of Australian junior SolGold, is The Northern Miner’s Mining Person of the Year for 2018 in recognition of his role as the driving force behind the wildly successful grassroots team that has drilled off the world-class Alpala gold-copper deposit at its Cascabel project in Imbabura province in northern Ecuador, with potentially many more discoveries to come in the region.

The past year was a pivotal one for Toronto- and London-listed SolGold. In November 2018, it tabled an updated resource for Alpala that tallied a staggering 2.1 billion indicated tonnes grading 0.41% copper and 0.29 gram gold per tonne, or 0.60% copper equivalent (at a 0.2% copper-equivalent cut-off), plus another 900 million inferred tonnes grading 0.27% copper and 0.13 gram gold, or 0.35% copper equivalent, at the same cut-off. These numbers are based on 133,600 metres of drilling.

That translates to a contained metal content of 8.4 million tonnes copper and 19.4 million oz. gold in the indicated category, and another 2.5 million tonnes copper and 3.8 million oz. gold in inferred.

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Delayed But Looming: The Question of Bougainville Independence – by Grant Wyeth (The Diplomat – March 14, 2019)

https://thediplomat.com/

The referendum for Papua New Guinea’s eastern region is now set for October. How its outcome will be handled remains unclear.

Earlier this month the date of the Bougainville independence referendum was pushed back. Initially — although tentatively — scheduled for June 15, the poll will now be held in October. Under the 2001 peace agreement that followed a decade-long civil war in Papua New Guinea (PNG), it was negotiated that a referendum on the future status of Bougainville would be held prior to mid-2020.

While preparations have been ongoing, it is believed the Bougainville Referendum Commission (BRC), headed by former Irish Prime Minister Bertie Ahern, would have been both financially and structurally struggling to meet the referendum’s requirements by June.

While the delay in the referendum isn’t a great surprise, the exact meaning of the referendum continues to be contested. PNG Prime Minister Peter O’Neill recently stated that the referendum is nonbinding, and that after the poll is conducted the PNG parliament will debate the results, and ultimately decide on whether Bouganville will become the world’s newest country.

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