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New York Copper Market Tightens Again, Piling Pressure on Shorts – by Mark Burton and Jack Farchy (Bloomberg News – June 19, 2024)

https://www.bnnbloomberg.ca/

(Bloomberg) — Spot copper prices are again trading at a steep premium to later-dated futures in New York, putting fresh pressure on holders of short positions after a historic squeeze last month.

The July-delivery Comex copper traded at a 7.4 cent-per-pound premium to the September contract, in a condition known as backwardation that typically signals a supply shortage. The spread traded in an unprecedented 29.25-cent backwardation last month, putting huge pressure on commodity traders and investors with short positions in the July contract.

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Sprott explains the new copper supercycle – by Staff (Canadian Mining Journal – June 13, 2024)

https://www.canadianminingjournal.com/

The following is an abridged version of the copper supercycle as explained by Sprott in its current monthly report.

A new copper supercycle is emerging, built on several rising geopolitical and market trends, including electrification, national security concerns, environmental policy, supply constraints and deglobalization. In combination, these are a powerful catalyst for copper demand.

The prior commodities supercycle that started two decades ago was driven by China rejoining the global economy, leading to mass industrialization and the urbanization of hundreds of millions of people. The current copper supercycle is far more global in reach, has many more demand sectors, and is entwined with the national security of many countries.

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Nevada Copper shareholders face loss of investment as Elliott Investment circles to provide emergency bankruptcy funding – by Niall McGee (Globe and Mail – June 12, 2024)

https://www.theglobeandmail.com/

Nevada Copper Corp. shareholders are poised to lose their entire investment, with the struggling Canadian miner seeking bankruptcy protection, and hoping to secure emergency financing from U.S. hedge fund Elliott Investment Management.

The Vancouver-based company has struggled for years to ramp up production at its Pumpkin Hollow copper mine in Nevada. Earlier this year, the company told investors it was a going-concern risk and was running a dangerously high debt load against a dwindling cash position. As of the end of March, Nevada Copper held only US$300,000 in cash, had a working-capital deficit of US$115.4-million, and total debt of approximately US$262-million.

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Rio Tinto CEO Jakob Stausholm may have to change strategy as company enters new round of upheaval – by Eric Reguly (Globe and Mail – June 8, 2024)

https://www.theglobeandmail.com/

Extrovert or introvert, buyer or builder, opportunistic or judicious. These are the existential questions that Rio Tinto must answer for itself as the global mining industry enters a new round of upheaval, driven by the lunge for metals critical to a low-carbon future. Which way will Rio, a primarily iron ore and aluminum producer, go?

No one knows, and there are enormous risks in both playing the mergers and acquisitions game and avoiding it. Rio knows it needs more copper – it is ranked a lowly eighth in terms of production. At the same time, its reputation for capital discipline and conservative thinking might make it shy away from bidding wars and hostile deals, perhaps even big mergers and acquisitions of the friendly variety.

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Traders Are Desperate for Copper Deals and Miners Are Cashing In – by Archie Hunter and Jack Farchy (Bloomberg News – June 5, 2024)

https://www.bnnbloomberg.ca/

(Bloomberg) — A heated competition for copper among some of the biggest commodity traders is creating opportunities for miners to negotiate favorable terms ranging from huge upfront payments to extra-long contracts.

Recent moves by cash-flush energy traders including Mercuria Energy Group Ltd. to expand in metals — a market long dominated by Glencore Plc and Trafigura Group — are raising tensions and sparking a scramble for contracts, at a time when the industry is already facing an unprecedented supply squeeze in copper ore.

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OPINION: BHP’s failed pursuit of Anglo American does not mean mining megadeals are dead – by Eric Reguly (Globe and Mail – June 1, 2024)

https://www.theglobeandmail.com/

BHP Group’s botched bid for Anglo American brings the curtain down on the greatest takeover attempt in global mining in more than a decade. The megamerger game will not end here. BHP’s lunge for its smaller rival highlighted a hard truth: Copper is in short supply and any big mining company without it will pay the price as economies strive for low-carbon futures.

The desire to own Anglo’s copper assets, including its 44-per-cent stake in Chile’s Collahuasi mine, one of the world’s biggest copper reserves, propelled BHP’s pursuit of Anglo. Copper is the metal considered most critical to the energy revolution.

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Anglo American refuses to extend takeover talks with BHP, signalling end of mining megamerger attempt – by Eric Reguly (Globe and Mail – May 30, 2024)

https://www.theglobeandmail.com/

BHP Group Ltd. BHP-N, the world’s biggest mining company, is seeing its megamerger proposal with Anglo American PLC fall apart, with the smaller company rejecting BHP’s call to extend the takeover talks.

Anglo’s rejection almost certainly kills BHP’s proposal to put the two companies together, which would have created the world’s biggest producer of copper, a metal considered critical to the transition to a low-carbon economy. Only a few days ago, it seemed the two sides were on the verge of an agreement.

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BHP walks away from proposed $49bn takeover of Anglo American – by Cecilia Jamasmie (Mining.com – May 29, 2024)

https://www.mining.com/

BHP (ASX: BHP) has withdrawn its proposal to buy Anglo American (LON: AAL) after the takeover target rejected early on Wednesday the world’s largest miner’s request to extend talks, and said that while it believes its bid was “compelling”, the company is committed to a “disciplined approach” to mergers and acquisitions.

“BHP will not be making a firm offer for Anglo American,” chief executive Mark Henry said in a statement published minutes before the 5 p.m. UK time deadline for the mining giant to make a formal bid. “While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost,” Henry noted.

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Feds lean on B.C. to produce more critical minerals – by David Carrigg (Vancouver Sun – May 22, 2024)

https://vancouversun.com/

B.C. has large tapped and untapped reserves of minerals deemed critical to Canada’s economic future

B.C. is playing a crucial role in the federal government’s plan to ensure Canada produces 31 minerals deemed critical to the economic future. During a Conversations Live project hosted by Stuart McNish on Wednesday night, an expert panel outlined how these important minerals are part of a larger geopolitical movement and that B.C. has huge prospects for growth and job creation in mining.

As an example, Michael Goehring, President and CEO of the Mining Association of B.C., said that B.C. produces 80 per cent of Canada’s copper and that mineral is turned into the “electrification metal.”

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Focus: Copper’s record run at risk as US shipments calm speculator frenzy – by Eric Onstad and Julian Luk (Reuters – May 20, 2024)

https://www.reuters.com/

LONDON, May 20 (Reuters) – Copper’s lightning rally to record highs may not be sustainable in the coming weeks, with action concentrated on the shipment of material to cover exposed short positions in the U.S. Comex futures market rather than tepid demand in top consumer China.

Prices on the CME Group’s Comex hit a record last week, while benchmark copper on the London Metal Exchange (LME) rocketed on Monday to an all-time peak of $11,104.50 a metric ton, having surged 28% so far this year.

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Billionaire-backed KoBold, Midnight Sun team up for Zambia copper discovery – by Henry Lazenby (Northern Miner – May 2024)

https://www.northernminer.com/

KoBold Metals, a U.S.-based startup supported by high-profile investors such as Bill Gates and Jeff Bezos, is venturing into Zambia’s rich copper belt. In February it partnered with Canada’s Midnight Sun Mining (TSXV: MMA) to explore the promising Dumbwa target within the Solwezi copper project.

This strategic alliance will leverage KoBold’s advanced data science techniques and Midnight Sun’s extensive local experience. The goal is for KoBold to earn a 75% stake in the Dumbwa target by investing US$15 million in exploration and making US$500,000 in cash payments over 4.5 years.

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Copper can’t be mined fast enough to electrify the US – by Morgan Sherburne (Michigan News – May 15, 2024)

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Copper cannot be mined quickly enough to keep up with current U.S. policy guidelines to transition the country’s electricity and vehicle infrastructure to renewable energy, according to a University of Michigan study.

The Inflation Reduction Act, signed into law in 2022, calls for 100% of cars manufactured to be electric vehicles by 2035. But an electric vehicle requires three to five times as much copper as an internal combustion engine vehicle—not to mention the copper required for upgrades to the electric grid.

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Copper surges towards record highs amid optimistic demand outlook – by Tina Teng (Euro News – May 15, 2024)

https://www.euronews.com/

Renewable energy, electric cars, and artificial intelligence (AI) are bolstering the demand outlook for copper, leading to a surge in the price of the industrial metal towards a new record high.

Copper prices have been soaring since the beginning of this year, rising by 29% year-to-date. Copper futures at COMEX traded at $5 per pound as of 15 May, marking the highest level since March 2022 when the base metal’s price reached an all-time high.

BHP’s takeover offer to Anglo American has brought attention to the prosperous copper mine sector. The transition towards green energy, the rise of electric cars, and the AI boom have all contributed to a surge in demand for copper. However, underinvestment in base metal mining could exacerbate the issue of undersupply in the coming years.

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BHP CEO Mike Henry says mining company will remain disciplined as it chases Anglo American acquisition – by Niall McGee (Globe and Mail – May 15, 2024)

https://www.theglobeandmail.com/

The Canadian head of BHP Group Ltd. says the world’s biggest mining company will remain disciplined as it chases an acquisition of struggling competitor Anglo American PLC, as concerns arise about the complexity and timelines around its US$43-billion takeover offer.

Speaking at a mining conference in Miami, BHP chief executive Mike Henry said that his company’s twice-rejected proposal remains “quite compelling,” and he signalled the Australian miner won’t overpay in its efforts to win over Anglo’s board. “We have a very, very hard-won reputation for discipline when it comes to capital allocation and we do not take that lightly,” he said.

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Anglo goes for bold breakup plan in move to fend off BHP – by Thomas Biesheuvel and William Clowes (Bloomberg News – May 14, 2024)

https://www.bnnbloomberg.ca/

Anglo American Plc will exit diamond, platinum and coal mining in a massive restructuring designed to fend off a £34 billion (US$43 billion) bid from rival BHP Group and turn itself into a copper giant.

Anglo’s hand was forced by BHP’s approach — which it has twice rejected — but the move also responds to pressure from shareholders to shed less profitable businesses and focus on the copper assets that are the envy of the industry. It leaves a much simpler company — and a potentially more attractive one to suitors.

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