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Copper Prices Are About to Go on Steroids, Citi Says (Bloomberg News – July 18, 2018)

https://www.bloomberg.com/

Copper’s slump amid a deepening global trade conflict offers a long-term buying opportunity, according to Citigroup Inc., which shrugged off fears for world growth to boost its long-term forecasts.

“Prepare for a decade of Dr. Copper on steroids,” analysts including Max Layton and Tracy Liao wrote in a July 17 note. The bank sees average annual prices at $8,000 a metric ton in 2022, passing $9,000 a ton by 2028 under its baseline scenario.

The metal, often viewed as a barometer of world economic health, closed Tuesday at $6,152 a ton in London. Copper has spiraled lower in the past six weeks as President Donald Trump upends global trade with disputes involving multiple nations, most critically with No. 2 economy China.

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Indonesia mine nationalization shakes top copper producer – by Jun Suzuki (Nikkei Asian Review – July 18, 2018)

https://asia.nikkei.com/

JAKARTA — Indonesia’s nationalization of a major copper and gold mine formerly run by U.S. metals company Freeport-McMoRan is a win for Indonesian President Joko Widodo who has been calling for the reclamation of strategic resources. But the lack of agreement over future investments puts one of the world’s biggest sources of the red metal on shaky grounds.

According to the basic agreement reached on Thursday, Freeport and Anglo-Australian peer Rio Tinto will sell their shares in the local joint venture that runs the Grasberg mine to state-owned resources company Indonesia Asahan Aluminum, or Inalum.

Inalum will pay a combined $3.85 billion to the two companies to acquire all of Rio Tinto’s interest and lift its overall stake to 51%. Freeport will hold onto the remaining 49% stake in the operator of the mine in eastern Indonesia’s Papua province. A final deal is expected this year.

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Nevsun stock climbs 14% on Lundin’s $1.4B offer, but CEO eyes ‘strategic’ alternatives – by Gabriel Friedman (Financial Post – July 18, 2018)

https://business.financialpost.com/

Vancouver-based Nevsun Resources Ltd. on Tuesday urged shareholders to ignore a potential $4.75 cash per share hostile takeover offer from Toronto-based Lundin Mining Corp., and the chief executive has already signalled how his company may respond when an actual offer materializes.

In a press release, Nevsun chief executive Peter Kukielski said “several strategic parties” have expressed interest in participating as it seeks to build its copper-gold mine in Serbia, known as Timok, raising the prospect that his company could sell a stake in the asset, or strike a joint partnership with another company, which would complicate Lundin’s takeover offer.

The proposed deal came back into the news after Lundin Mining on Monday announced it intends to bid approximately $1.4 billion for Nevsun, at $4.75 per share, and plans to release a formal offer by the end of the month. In May, Lundin sought to purchase only Timok, and enlisted Euro Sun Mining Inc. to purchase Nevsun’s other main asset, a zinc-copper mine in Eritrea known as Bisha.

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Lundin makes another move to buy Nevsun – by Mariaan Webb (MiningWeekly.com – July 17, 2018)

http://www.miningweekly.com/

Keen to bring the Timok copper project, in Serbia, into its fold, Canadian firm Lundin Mining has announced that it will take a C$1.4-billion offer directly to Nevsun Resources shareholders, after unsuccessful attempts to engage with the company over the past five months.

Lundin, which earlier this year tried to buy Nevsun in a deal with Canadian junior Euro Sun, is now going at it alone, with a C$4.75 a share cash consideration, which it points out is a 82% premium to the target company’s closing price of C$2.61 a share when it first expressed interest in acquiring Timok.

The offer is also a premium to Nevsun’s closing price of C$4.21 a share on Monday. The prize for Lundin will be the Timok project, which has a probable reserve of 27-million tonnes at an average grade of 3.3% copper and 2.1 g/t gold, containing 0.89-million tonnes of copper and 1.8-million ounces of gold.

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Trade war jitters have halted the commodity rally and could disrupt miners’ plans for big projects – by Gabriel Friedman (Financial Post – July 14, 2018)

https://business.financialpost.com/

Speaking at a conference in early June, Vancouver-based Teck Resources Ltd.’s chief executive Don Lindsay raved that his company invested “in the right commodities at the right time,” with a nod to one of its biggest bets — copper.

Lindsay predicted copper soon would hit US$3.50 per pound, at which point his company’s long-planned Quebrada Blanca 2 project — a 300,000-ton per year copper mine to be constructed in northern Chile’s high desert — would add $1 billion dollars per year in cash flow.

“That price is not far off,” he said at the June conference in Chicago, organized by Deutsche Bank, at a time when copper had experienced nearly a year of gains.

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World’s Biggest Miners Want More Copper But Nobody’s Selling – by Thomas Biesheuvel (Bloomberg News – July 17, 2018)

https://www.bloomberg.com/

It’s the mining world’s biggest dilemma: everyone’s hunting for copper deals, but even the richest producers just can’t pull the trigger.

The largest miners all say they’re bullish on copper and looking for growth in the metal that’s forecast to be in ever-greater demand as cities expand and electric vehicles gain traction.

The industry has deep pockets for deals right now — Rio Tinto Group may end the year having raised $8.5 billion from asset sales and rivals like BHP Billiton Ltd. and Glencore Plc are churning out massive profits.

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COLUMN-The shadowy Chinese fund at the heart of the copper rout – by Andy Home (Reuters U.K. – July 11, 2018)

https://uk.reuters.com/

LONDON, July 11 (Reuters) – Copper prices are in free fall as the United States dials up the trade tension with China. On the London Metal Exchange (LME) copper for three-month delivery touched a one-year low of $6,081 per tonne on Wednesday. The fall from last month’s high of $7,348 has turned brutal.

Slide has become rout as momentum-chasing funds pile in on the short side. LME broker Marex Spectron estimates that as of last Friday the collective speculative short had reached 18 percent of open interest, a level not seen since 2016. And it has almost certainly grown further since.

But it’s a fund of another kind that has grabbed the market’s attention. Few outside China will have heard of Gelin Dahua Futures Co. Ltd. But the Shanghai copper market has been tracking its massive bull position since July of last year.

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Indonesia to pay $3.85 billion for majority stake in Freeport’s Grasberg copper mine – by Wilda Asmarini and Bernadette Christina Munthe (Reuters U.S. – July 11, 2018)

https://www.reuters.com/

JAKARTA (Reuters) – Indonesia on Thursday struck an agreement with Freeport-McMoRan Inc and Rio Tinto to buy a controlling stake in the world’s second-biggest copper mine via a series of transactions valued at $3.85 billion.

The heads of agreement establishes a structure for Indonesia, through its state-owned mining holding company PT Inalum, to gain control of the Grasberg mine located in the country’s eastern province of Papua. The deal should cap years of wrangling over the rights for the site as Jakarta seeks to gain greater control over its mineral wealth.

Last August, the two sides agreed to let Freeport (FCX.N) keep operating the mine possibly until 2041 while ceding control over its local unit, PT Freeport Indonesia.

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Four Underground Rescue Efforts That Riveted the World – by Christina Caron and Julia Jacobs (New York Times – July 8, 2018)

https://www.nytimes.com/

After two weeks of huddling in a flooded cave in northern Thailand, several of the 12 boys who were trapped with their soccer coach have been rescued in a harrowing extraction that could take days to complete.

Divers on Sunday began pulling the boys to safety through long, narrow passageways that are challenging for even the most skilled cave divers. With the world watching, the rescue team was racing against rising floodwaters in what has become one of the most engrossing rescue missions in recent years.

Here is a look at other underground rescue attempts — some successful, some not — that have transfixed people around the world.

1975: Indian Mine Explosion Kills Hundreds

A blast at a coal mine in northeast India triggered flooding from a nearby reservoir that killed hundreds of miners.

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As Arctic warms, reindeer herders tangle with new industries – by Gwladys Fouche and Alister Doyle (Reuters U.S. – July 9, 2018)

https://www.reuters.com/

FINNMARK PLATEAU, Norway/OSLO (Reuters) – When he’s not out on the Arctic tundra with his 2,000 reindeer, his dog and Whitney Houston blasting through his headphones, Nils Mathis Sara is often busy explaining to people how a planned copper mine threatens his livelihood.

Along with other Sami herders and fishermen, the 60-year-old is in a standoff with the mine owners, Norwegian officials and many townspeople that is, after six years, coming to a head.

It is a litmus test for the Arctic, where climate change and technology are enabling mineral and energy extraction, shipping and tourism while threatening traditional ways of life and creating tensions among its four million inhabitants.

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Labor talks at BHP’s Escondida mine in Chile enter ‘home stretch’ – by Dave Sherwood and Antonio De la Jara (Reuters U.S. – July 6, 2018)

https://www.reuters.com/

SANTIAGO (Reuters) – Labor negotiations at BHP Billiton Plc Escondida copper mine in Chile, the world’s largest, are entering into the final three weeks before a 30-month contract expires at the end of July.

The closely watched talks come little more than one year after failure to reach a labor deal at the sprawling deposit led to a 44-day strike that jolted the global copper market.

BHP and the union have reached agreement on about one-fifth of the “points of interest,” raised by either party, according to an internal union document seen by Reuters that summarized progress in negotiations during the month of June.

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Copper price takes another huge hit – by Frik Els (Mining.com – July 5, 2018)

http://www.mining.com/

The price of copper suffered its seventh straight day of declines on Thursday, losing more than 3% in New York to $2.8205 or $6,220 a tonne on the Comex market, its lowest level since July last year.

It was one of the busiest days of 2018 on commodity futures markets with with over 2.3m tonnes of September copper worth $14.6 billion exchanging hands by mid-afternoon. 2018 star performer nickel also succumbed on Thursday, becoming the last of the base metal complex to drop below its 100-day moving average at $14,200 a tonne. Zinc’s woes continued and the metal is now down nearly 20% year to date.

Reports out on Thursday suggest the trade spat between the US and China, responsible for half the world’s consumption of copper, could quickly turn nasty. President Trump’s 25% tariffs on more than 800 Chinese goods worth $34 billion kick in midnight Friday. The latest round comes a few months after duties on steel and aluminum exports from China and other countries went into effect.

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First Quantum Gets Time to Solve $7.9 Billion Zambia Tax Row – by Taonga Clifford Mitimingi and Gordon Bell (Bloomberg News – July 5, 2018)

https://www.bloomberg.com/

Zambia agreed to give First Quantum Minerals Ltd. more time to complete its analysis of what the company might owe the southern African nation after it was slapped with a $7.9 billion tax bill, according to the finance minister.

The Vancouver-based company is challenging the assessment from Zambia’s revenue agency, which claims First Quantum incorrectly declared imports for one of its two mines in Africa’s second-biggest copper producer. The government has audited major mining companies operating in the country, which include Vedanta Resources Plc and Glencore Plc.

“They are doing their own analysis and they have asked for a bit more time,” Finance Minister Margaret Mwanakatwe, 56, said in an interview in her office in Lusaka, the capital, on Thursday. “We have given them a month so that they can complete the analysis.”

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UPDATE 2-Indonesia extends permit for giant Freeport copper mine as talks continue – by Wilda Asmarini (Reuters U.S.- July 4, 2018)

https://www.reuters.com/

JAKARTA, July 4 (Reuters) – Indonesia has extended a temporary operating permit for Freeport McMoRan Inc’s Grasberg project, the world’s second-biggest copper mine, until the end of the month while discussions continue over long-term rights.

Freeport’s local unit, PT Freeport Indonesia (PTFI), has been given a temporary operating permit for Grasberg until July 31, Coal and Minerals Director General Bambang Gatot Ariyono told reporters at a press conference on Wednesday.

Phoenix, Arizona-based Freeport has been in negotiations with Indonesia to secure long-term operating rights at Grasberg after the government introduced new rules last year aimed at giving Jakarta greater control over the nation’s resources.

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Indonesia Says $4 Billion Grasberg Deal May Be Signed This Week – by Tassia Sipahutar (Bloomberg News – July 2, 2018)

https://www.bloomberg.com/

Indonesia confirmed it’s closer to reaching an almost $4 billion agreement to take control of Freeport-McMoran Inc.’s giant Grasberg copper and gold mine after more than a year of negotiations.

Talks between state-owned PT Indonesia Asahan Aluminium, known as Inalum, Freeport and Rio Tinto Group have been completed and an agreement could be signed as early as this week, Indonesia’s State-Owned Enterprises Minister Rini Soemarno and Deputy Minister Fajar Harry Sampurno said on Saturday. On Monday, Freeport shares fell along with copper prices.

“We are finalizing the necessary documents,” Soemarno told reporters in Jakarta. “They are asking for stability in investment. They want to have documents that provide clarity in investment calculations, clarity in tax. These are all being processed.”

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