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Copper to remain weak, says mining chief – by Henry Sanderson and Neil Hume (Financial Times – May 19, 2016)

https://next.ft.com/

Antofagasta CEO warns prices will stay low for at least two years

Copper prices are likely to remain low for at least the next two years, the new boss of Chilean miner Antofagasta said on Thursday, as prices for the industrial metal fell to their lowest level since February.

The market is likely to be in a surplus of around 300,000 tonnes this year and next as growth in China’s demand slows to just over 2 per cent, said Iván Arriagada, who became chief executive of the UK-listed miner last month.

Commodity prices have retreated from their March highs after an estimated $1tn surge in credit in China in the first quarter pushed up imports to record levels. Prices for copper are down over 7 per cent this month to just above $2 a pound, or $4,500 a tonne on the London Metal Exchange. In March, they rose to more than $5,000 a tonne.

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China’s $3.6 Billion PNG Copper Mine Faces 2-Year Approval Wait – by David Stringer(Bloomberg News – May 19, 2016)

http://www.bloomberg.com/

China-owned PanAust Ltd. estimates it may take as long as two years to win approvals for its expanded $3.6 billion copper project in Papua New Guinea as bigger rivals forecast a deficit of the metal by the decade’s end.

A revised development plan for the Frieda River project by state-owned Guangdong Rising Assets Management Co.’s Australian unit more than doubled an earlier cost estimate following a better understanding of the earthworks required, PanAust General Manager of Corporate Development Joe Walsh said Thursday in a phone interview.

The new study also raised forecasts for copper output about 40 percent to 175,000 metric tons a year.“Commodity prices are, in our view, going through a cyclical low and we do envisage that in the fullness of time we will see prices recover,” Walsh said.

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Zambia’s chamber of mines defends new price-based mineral tax (Reuters Africa – May 18, 2016)

http://af.reuters.com/

LUSAKA (Reuters) – Zambia’s new price-based mineral royalty tax will enhance the collection of government revenue rather than compromise it, the Chamber of Mines said on Tuesday, defending the new levy after recent criticism.

The chamber’s president Nathan Chishimba was reacting to a statement by civil society organisations advising against the new tax regime on the grounds it was investor-led and would not maximise revenue in times of commodity price booms.

“One cannot separate mining tax revenue from mining investment, because it is the mining investment which ultimately produces the tax revenue,” Chishimba said in a statement. Zambia’s amended mines bill proposes to reduce copper royalties to a variable tax of 4 to 6 percent, depending on the price of the metal.

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Debt reduction high on priority list of major miners Freeport, Vale – by Henry Lazenby (MiningWeekly.com – May 10, 2016)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Managing and reducing debt levels can be a balancing act, but it is high on the priority lists of major diversified miners Freeport McMoRan and Vale, the companies confirmed on Tuesday.

Addressing the Bank of America Merrill Lynch’s 2016 Global Metals, Mining and Steel Conference, in Florida, Freeport president and CEO Richard Adkerson advised that the company would aim at getting its debt level down to around $10-billion in the next two to three years, “if the market opens the door for us”.

“We clearly could do this with asset sales. It all boils down to reduce debt, reduce debt, reduce debt. We want to retain value and raise some capital. We’re having a series of discussions about further asset transactions and are open to discussions on all of our assets,” he said, declining to reveal more.

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COLUMN-Restrained copper is the sensible commodity in China – by Clyde Russell (Reuters U.S. – May 10, 2016)

http://www.reuters.com/

May 10 Copper is probably the best reality check right now for China’s commodity markets, with the industrial metal showing why the recent surge in commodity prices was unjustified, but also why a collapse is not warranted.

China’s imports of unwrought copper fell sharply in April to 450,000 tonnes, down 21.1 percent from March’s 570,000 tonnes, and only up a modest 4.7 percent from the same month a year earlier, according to customs data.

It wasn’t just refined metal that showed a marked pullback from March’s exuberance, with imports of ores and concentrates slipping 8 percent in April from the prior month to 1.26 million tonnes. There are some fundamental factors that help explain the drop in April’s copper imports, such as the closing of the arbitrage window between London and Shanghai prices and bulging domestic inventories.

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Rio’s $5.3 billion go-ahead fuels hopes of end to Mongolia’s hangover – by Terrence Edwards (Reuters U.S. – May 9, 2016)

http://www.reuters.com/

ULAANBAATAR – Rio Tinto’s long-awaited approval of a $5.3 billion extension for its giant Oyu Tolgoi copper mine is fuelling hopes of a revival at last for Mongolia, battered by a slowdown in neighboring China that has left it deep in debt.

Oyu Tolgoi, one of the world’s largest undeveloped copper projects, has been a bellwether for Mongolia since its discovery more than a decade ago. But as discussions with the government stalled in 2013 and prices collapsed, Rio put the flagship project on the backburner – and confidence in Mongolia crumbled.

Rio’s decision to go ahead with the costly and complex expansion is a bet on copper’s recovery for a miner that badly needs to recalibrate its iron ore-heavy portfolio. Mining executives, government officials, diplomats and analysts say it is also a potentially game-changing boost for Mongolia that could spark the unblocking of other projects and restore investor trust, key steps for the country to meet debt repayments due from 2017.

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Freeport Selling DRC Mine to China Moly for $2.65 Billion – by Thomas Biesheuvel and Danielle Bochove (Bloomberg News – May 9, 2016)

http://www.bloomberg.com/

Freeport-McMoRan Inc. agreed to sell its Democratic Republic of Congo copper mine to China Molybdenum Co. for $2.65 billion as the Phoenix-based company reduces debt racked up in the commodities boom.

China Molybdenum will acquire Freeport’s indirect 56 percent stake in the Tenke Fungurume mine, which also produces cobalt, via a 70 percent interest in TF Holdings Ltd., Freeport said in statement Monday. The two companies also agreed to negotiate the sale of its interests in other cobalt assets.

Freeport, which plunged 71 percent last year as commodity prices collapsed, has been seeking to offload assets and reduce a debt load that stood at $20 billion at the end of 2015. Chief Executive Officer Richard Adkerson said last month he expected to sell more mines and the Tenke deal brings the total to more than $4 billion this year.

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From ‘Minegolia’ to a country in crisis: Mongolia looks to reverse its fortunes – by Nathan Vanderklippe (Globe and Mail – May 9, 2016)

http://www.theglobeandmail.com/

ULAN BATOR — Chimgee remembers the days people crowded in front of her meat market stall, waiting to buy from her storage locker jammed to the ceiling with beef, goat, sheep, camel and horse carcasses. “It was full, and people would line up here to buy from me,” she said. “People would say, ‘Buy from Chimgee! Buy from Chimgee!’”

After they finished buying meat, they might head downtown to pick up a condo, or a new Rolls-Royce. After all, they lived in “Minegolia,” a country about the size of Quebec and so jammed with mineral resources that respectable people talked about a future as the next Qatar or Brunei, with fabulous wealth shared among a population of just three million.

Theirs was a Canadian story, too: Canadian miners made up a large percentage of the foreign investors prepared to pour in capital. Growth of 17.5 per cent in 2011 made a gilded future look inevitable. The International Monetary Fund expected the country’s gross domestic product growth to keep roaring at 14 per cent through 2016. It wasn’t hard to find people who thought it could double that performance.

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Copper proves a rocky road for Zambia – by John Filitz (Global Risk Insights – April 25, 2016)

http://globalriskinsights.com/

The town of Luanshya, situated on Zambia’s copperbelt, serves as a bellwether for the country’s economy. However, political developments in Zambia are causing significant uncertainties in the copper industry.

With a sustained annual GDP growth rate above 6%, driven primarily by copper, the past decade has been tumultuous for Luanshya. Founded as a service town for the country’s first copper mine, Roan Antelope Copper Mines Ltd in 1927, the town in the northwest of the country has through the years seen significant episodes of copper prices driving booms and busts.

The first such episode occurred in the early 1930s, reducing an initial workforce of 31 941 at the peak of the 1930 boom to just 6 677 by the end of 1932. The second and possibly the most protracted collapse occurred during the post-liberation period of state ownership.

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Freeport confident of more copper asset sales by mid-year: CEO – by Nicole Mordant (Reuters U.K. – April 26, 2016)

http://uk.reuters.com/

Freeport-McMoRan Inc (FCX.N) expects to have agreed $3 billion worth of asset sales by mid-year, its chief executive said on Tuesday, as the U.S. miner and oil producer tries to whittle down a nearly $21 billion debt pile he described as “a killer.”

Freeport, which is the world’s biggest listed copper producer, has already entered into agreements this year to sell $1.4 billion worth of assets, leaving another $1.6 billion’s worth to transact by end-June.

Chief Executive Richard Adkerson said Freeport was in “advanced discussions” on a number of its copper assets, but declined to name them. Freeport owns a number of world-class copper assets, including the Grasberg mine in Indonesia and the Cerro Verde mine in Peru.

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Freeport mulls selling minority stake in copper mine portfolio – by Rachelle Younglai (Globe and Mail – April 25, 2016)

http://www.theglobeandmail.com/

Freeport McMoRan Inc. is considering selling a minority stake in its portfolio of copper mines, one of the options on the table as the company scrambles to slash its $20-billion (U.S.) debt load, sources familiar with the matter said.

Freeport had initially planned to take part of its energy business public to raise cash. But with oil prices in the dumps and scant investor interest, the company put those plans on the back burner, the sources said.

Now, Arizona-based Freeport is mulling selling a stake of up to 20 per cent in its suite of mining assets in the Americas and maybe Africa, the sources said. It is unknown how much Freeport is expecting to get or whether the company can find investors willing to buy a stake. One name that has been floated has been China’s Citic, a government-owned investment firm, sources said.

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Mining taps deep reserves of rage in Peru – by Andres Schipani (Financial Times – April 20, 2016)

http://www.ft.com/

Cocachacra, Peru – In a corner of southern Peru the land is so barren that Nasa uses it as a stand-in for Mars to see if potatoes can be grown on that lifeless planet. But the desert of red dirt gives way to the green Tambo river valley, where farmers live off an abundance of onions, rice and sugar cane.

Some locals are taking up arms to protect this oasis. Last year, three were killed and hundreds wounded in violent clashes over the $1.4bn Tía María copper and gold mine, owned by Southern Copper, which is perched by the valley. Black-clad anti-riot police are now stationed there.

“Whoever is the next president will have to deal with mining conflicts because neither companies nor governments respect communities,” says Jesús Cornejo, head of the water users’ association in the nearby town of Cocachacra, which is peppered with green flags reading: “Yes to farming, no to the mine.”

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Copper King Turns Money Pit as Serbs Wind Down State Economy – by Gordana Filipovic and Michael Winfrey (Bloomberg News – April 19, 2016)

http://www.bloomberg.com/

Miners at Serbia’s state-owned RTB Bor copper pit are worried. Their equipment is crumbling, the workforce has been diminished and it costs them more to produce the metal than they can sell it for.

“Some of our machines are older than our oldest workers,” Vlada Stefanovic, a union leader, said Thursday from his office near the huge canyon’s rose-colored terraces, carved by years of mining the mountains four hours from the capital, Belgrade. “If we had five new trucks, one dredge and a drill, there would be more work for all of us.”

That’s probably not going to happen. Bor, once the pride of Socialist Yugoslavia, is at the center of a struggle to retool a $38 billion economy that missed out on the transformation that has lifted living standards in much of former communist eastern Europe.

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Ajax mine opponents challenge economics of project – by Derrick Penner (Vancouver Sun – April 18, 2016)

http://vancouversun.com/

Environmental opponents to the KGHM Ajax Mining Inc. proposal for an open pit mine near Kamloops are questioning whether the project will wind up being a marginal operation subject to early closure, according to a recent report.

The Kamloops Area Preservation Association, with the group Mining Watch, added an economic component to their case against the mine, arguing that company estimates for long-term prices of its key products are too high and costs too low, which could affect its long-term viability.

Those groups made their case in a report, characterized as an economic risk analysis, which was in their filings to the B.C. environmental assessment process.  “Copper is in trouble and this (mine proposal) isn’t different from others,” said Joan Kuyek, the analyst who prepared the report, who is the founding national co-ordinator for Mining Watch Canada.

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Copper Collapses As China Prepares To Dump Surplus Metal In A Repeat Of Its Steel Export Flood – by Tim Treadgold (Forbes Magazine – April 8, 2016)

http://www.forbes.com/

Dr Copper is ill, again.

The metal which acts as a barometer of global industrial production thanks to its use in everything from household appliances to cars, power generation and construction has hit another speed bump on what was thought to be at the start of a long-term price recovery.

From a multi-year price low of around $1.97 a pound in late January copper rose by 16% to $2.30/lb on March 21. Since then it’s been one-way traffic with the price dipping to $2.11 and looking weak.

Whether copper, which earned its Dr Copper nickname because of its celebrated ability to reflect the underlying health of the economy, will re-test the $2/lb mark is a question worrying producers of the red metal.

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