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Copper

Gold to Copper Bulls Left Heartbroken as Price Collapse Deepens – by Millie Munshi (Bloomberg News – November 12, 2015)

http://www.bloomberg.com/

Metal markets took a pounding on Thursday, sending gold to a five-year low and copper to the cheapest since 2009. Falling prices are dragging down producer shares, pushing the Bloomberg World Mining Index to a five-week low.

Investors are fleeing — withdrawing more than a $1 billion from exchange-traded funds tracking industrial and precious metals just this month, data compiled by Bloomberg show. Platinum dropped Thursday in the worst losing streak since 2002, while silver posted its longest slump since March 2014.

While China’s slowing growth has pressured prices, the country’s not all to blame for an acceleration of the metals meltdown. The latest catalyst for the collapse is the rapid shift in investors expectations for higher U.S. interest rates.

Traders are pricing in a 66 percent chance that Federal Reserve officials will start tightening monetary policy next month, up from 39 percent a month earlier.

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Glencore Shares Skid as Metals Slump – by Scott Patterson and Ira Iosebashvili (Wall Street Journal – November 11, 2015)

http://www.wsj.com/

A drop in copper prices and other mining commodities has halted a recent rebound in the company’s stock

Shares of Glencore PLC and other large miners plunged anew on Thursday, as a slump in copper prices revived worries about companies’ ability to shoulder large debt loads.

Glencore’s stock fell 7.6% to close below £1 for the first time in more than a month, bringing losses to 24% over the last six trading sessions.

The renewed weakness in the Swiss miner’s shares is a sign that investors are again jittery about the company’s ability to pay down billions in debt amid what many analysts say is likely to be a prolonged decline in commodity prices. Copper, which is Glencore’s main earnings driver, sank to a fresh six-year low on Thursday.

The selloff is stoking worries of a repeat of a late-September rout, when Glencore’s shares plummeted nearly 30% in one day.

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Copper’s Rout Deepens As China’s Inflation Decelerates – by Tatyana Shumsky (Wall Street Journal – November 10, 2015)

http://www.wsj.com/

Decline in copper prices is reverberating across the global mining sector

Copper prices extended their six-year low on Tuesday after Chinese inflation decelerated, stoking investor concerns about demand from the world’s top copper buyer.

China’s consumer-price index, a measure of inflation, rose 1.3% in October from a year earlier, less than the 1.4% gain economists predicted and a slowdown from September’s 1.6% increase. The lack of price pressure suggests that demand and overall economic activity continue to lose steam in the world’s no. 2 economy.

“The Chinese economy is in a slowdown and it needs more stimulus to start movement that would utilize all the copper they already have,” said Ira Epstein, a broker with Linn & Associates in Chicago. “If they don’t stimulate, you’re going to get another leg lower to $2.10 copper and it’s going to create a lot of pain.”

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Edward Burtynsky’s Mesmerizing Images of Copper Mines – by Jon Mooallen (New York Times – October 22, 2015)

http://www.nytimes.com/

Trying to comprehend the scale of open-pit extraction with aerial photographs.

The scale of an open-pit copper mine feels impossible; it is a Bible-grade phenomenon made by machines. Vehicles called bucket-wheel excavators, nearly five times the size of the largest dinosaurs, rip up the surface and gradually descend, piling 200,000 cubic meters or more of rock behind them every day.

Once the copper is extracted, waste products and unrecoverable metals stream out as tailings, snaking tributaries that turn psychedelic-looking as they oxidize in open air for the first time in millions of years. Each excavator, meanwhile, turns the land it is standing on into a ledge and leaves a succession of these steps, or ‘‘benches,’’ behind it as it goes.

The Chino Mine, for example, in Grant County, N.M., has been excavated persistently for more than a century and now stretches almost two miles across and 1,350 feet down. It’s a chasm, a void, a deep and disordered amphitheater built around an abyss. It gets four out of five stars on TripAdvisor.

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The 33 review – solidly made but cumbersome chronicle of Chilean miners’ miraculous rescue – by Andrew Pulver (The Guardian – November 9, 2015)

http://www.theguardian.com/

The ordeal of 33 men trapped in a Chilean mine in 2010 attracted the world’s media. That story demonstrated the indomitable human spirit in a way this Hollywood film version doesn’t match

Almost as soon as the 33 men trapped in the San José mine in Chile were rescued, the disputes and recriminations over potential film adaptations of their extraordinary ordeal began to surface too; for low-paid men in a normally ignored industry in a marginalised part of the world, unwittingly caught up in a genuinely astonishing feat of derring-do that commandeered the world’s media for weeks, an unthought-of opportunity had opened up.

The disagreements are still rumbling along in the background, even as the film is unveiled: a modestly budgeted Hollywood production, starring Antonio Banderas and Juliette Binoche, with the Mexican-born director of Girl in Progress, Patricia Riggen, behind the camera.

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These 10 mines will set the copper price for the next decade – by Vince Peckham (Mining.com – November 3, 2015)

http://www.mining.com/

Chile’s state-owned copper giant Codelco’s announcement today of another round of layoffs is just the latest sign of an industry under stress. Copper has recovered from six-year lows struck late August on the back of supply cuts by major producers but at around $2.30 a pound or $5,000 per tonne on Tuesday there isn’t much breathing room for producers.

The latest estimates by the Lisbon-based International Copper Study Group paint a very different picture from the previous forecast made in April. The market is now expected to be broadly in balance this year and to fall into a deficit of 130,000 tonnes in 2016. This compares with April’s forecasts of surpluses of 364,000 and 228,000 tonnes respectively.

According to ICSG World mine production, after adjusting for expected disruptions, is expected to increase by around 1.2% in 2015 to 18.8 million tonnes. 2014 recorded similar growth rates. The expected market shortfall in 2016 will be against a backdrop of higher mine output of around 4% expected next year.

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Chile’s Codelco lays off over 4,000 workers – by Cecilia Jamasmie (Mining.com – November 3, 2015)

http://www.mining.com/

Codelco’s chief executive Nelson Pizarro is following through with his promise of cutting costs “to the bone” as the Chile-owned miner announced it has cut almost 3,900 jobs, including contractors, in response to low prices and weak demand.

Until now, the world’s top copper producer had only disclosed the layoff of about 400 employees, mostly staff members in top positions.

The fresh and massive cuts bring the number of layoffs to over 4,000, making of Codelco the mining company that has let go the highest amount of workers in Chile since metal prices began their decline over a year ago.

According to Pizarro, the “painful, but necessary” move has not affected production, local newspaper El Mercurio reports (in Spanish). “What’s more, the company’s output has grown 5.5% during the last year, and costs have dropped by about 11%,” he told the paper.

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Can canoeing and mining coexist? Yes: Northland needs both mining and pristine nature – by Karl Everett (Duluth News Tribune – November 1, 2015)

http://www.duluthnewstribune.com/

Karl Everett of Duluth is a professional engineer, a geologist and a paddler. He has worked as a senior environmental manager; has consulted for mining and industrial clients; and has worked on many mining, metal and nonmetal projects.

We need mining for jobs and the economy in Minnesota. Mining continues to be one of the largest contributors to Northeastern Minnesota’s economy and directly employs thousands of men and women in high-paying jobs with medical benefits and supports additional people employed by vendors.

Part of the direct impact to the economy includes taxes and royalties paid by the mining industry toward Minnesota’s education.

Environmental management is a worldwide issue. After seeing pictures from Beijing during the Olympics, I think we are better at environmental management than most countries.

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Glencore to Invest $950 Million Upgrading Zambia Copper Mine – by Andy Hoffman and Matthew Hill (Bloomberg News – October 29, 2015)

http://www.bloomberg.com/

Glencore Plc plans to invest $950 million over three years to expand operations at its Mopani Copper Mines as part of a plan to refurbish assets and lower production costs in Zambia.

The Swiss mining company last month announced it’s halting production for 18 months in Zambia, Africa’s second-largest copper producer, in response to a drop in prices for the red metal.

“We continue to employ over 10,000 people at Mopani, and will be investing $950 million in site expansions and upgrades to extend the life of mine,” Baar, Switzerland-based Glencore said Wednesday in an e-mailed response to questions.

Copper production costs at Mopani, the previously state-owned mines in which Glencore purchased a majority stake in 2000, are more than $2.50 a pound. Glencore has said the upgrade will reduce the operation’s costs to $1.70 per pound, below the current spot price of about $2.34 a pound.

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[VIDEO] Inside Rio Tinto’s Oyu Tolgoi underground mine – by Robert Spence (Global Mining – October 27, 2015)

 

http://www.miningglobal.com/

Located in the southern Gobi desert of Mongolia, roughly 50 miles from the China border, Rio Tinto’s Oyu Tolgoi mine is anticipated to become one of the largest copper-gold deposits in the world.

First discovered in 2001, the mine is expected to produce an average of 430,000 tons of copper and 425,000 ounces of gold per year, as well as by-product silver and molybdenum, over its mine life. The mine estimated to contain 2.7 million tons of recoverable copper and 1.7 million ounces of recoverable gold in reserves, with an estimated operating life cycle of 50 years.

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Declining copper prices a large factor in Zambia’s economic tumble – by Geoffrey York (Globe and Mail – October 27, 2015)

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.

JOHANNESBURG — Just three years ago, Zambia was the darling of international investors. Its debut euro bond was oversubscribed by a spectacular 15 times, attracting orders of nearly $12-billion (U.S.), even though it was offering lower interest rates than some developed-world bonds.

The copper-rich African country, newly anointed at the time as a “middle income nation” by the World Bank, had become a favourite of Canadian mining companies, including Barrick Gold Corp. and First Quantum Minerals Ltd., both of which were among Zambia’s biggest private employers.

Swiss-based mining giant Glencore PLC was another major player in Zambia as the country became the second-biggest copper producer in Africa. Copper accounted for 70 per cent of Zambia’s export earnings and there seemed no end to the boom.

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[Ivanhoe Mines] Despite commodity slump, Canadian firm seeks to launch major copper project in DR Congo (Mail and Guardian Afric – October 21, 2015)

http://mgafrica.com/

“Even if China is running out of steam or slowing down today, other countries are still asking for copper.”

COPPER prices have fallen 20% in the past 12 months, but Canada’s Ivanhoe Mines is taking the long view as it invests in a new giant deposit in the Democratic Republic of Congo, eyeing a future deficit in the market and rising global demand.

The discovery at Kamoa in the southeast of the vast mineral-rich country has been presented as one of the biggest finds in copper mining in many years, though DR Congo is already Africa’s top copper producer and one of the world leaders.

“We think we can begin production at the end of 2018,” Louis Watum, the head of Ivanhoe DRC, told a recent mining conference in Kinshasa.

But in the commodities market, mining companies have been struck by a sharp fall in prices, affected by the economic slowdown in top consumer China.

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Indonesian battle over Freeport threatens to mar leader’s U.S. trip – by Randy Fabi and Wilda Asmarini (Reuters U.S. – October 16, 2015)

http://www.reuters.com/

Jakarta – Indonesian ministers are battling over control of U.S. mining giant Freeport-McMoRan’s future in the country, threatening to mar the president’s first trip to the United States later this month.

President Joko Widodo starts a five-day trip to Washington and San Francisco on Oct. 25, as investor sentiment in Southeast Asia’s largest economy brightens following a cabinet reshuffle and a series of new stimulus measures.

One of Widodo’s first stops will be with Freeport executives at a breakfast ahead of his meeting with U.S. President Barack Obama, according to a tentative schedule obtained by Reuters.

At the heart of talks will likely be Freeport’s years-long bid to renew its contract, allowing the firm to continue operating beyond 2021 at the lucrative Grasberg mine in Papua, one of the world’s biggest deposits of gold and copper.

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Copper King Has Stomach to Keep Producing, Spending in Rout – by Jesse Riseborough and Agnieszka De Sousa (Bloomberg News – October 13, 2015)

http://www.bloomberg.com/

For copper bulls betting on more mining companies cutting production like Glencore Plc, the news out of Chile isn’t good.

Codelco, the world’s biggest copper producer, is maintaining output targets and warning investors not to expect any dramatic changes to its record investment plans.

Codelco’s mines probably will remain profitable even as concern over Chinese demand is set to keep prices low in the coming years, Chairman Oscar Landerretche said in an interview Monday in London. While there will be minor revisions, the majority of a $25 billion, five-year investment plan to help replace aging deposits will be rolled out as planned, he said.

“We will have to rationalize, but the projects, we will do,” he said, adding that a review of the state-owned Chilean miner’s investment budget will be completed later this month. “One shouldn’t expect big dramatic changes in the strategic position.”

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Glencore to sell copper mines in Australia, Chile – by OLIVIA KUMWENDA-MTAMBO AND SONALI PAUL (Reuters U.K. – October 12, 2015)

http://uk.reuters.com/article/

LONDON/MELBOURNE – Glencore (GLEN.L) plans to sell copper mines in Australia and Chile as the mining and trading company aims to reduce a debt burden accumulated in an asset buying spree that has shaken confidence in the Swiss-based firm.

Selling assets is one element of a broad plan to cut about a third of Glencore’s $30 billion (19.6 billion pounds) net debt and to regain the trust of investors after its shares tumbled to record lows this year amid weak global commodity prices.

Glencore said it would sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile after receiving interest from potential buyers.

“This will allow potential buyers to bid to purchase either one or both of the mines and may or may not result in a sale,” Glencore said in a statement on Monday.

A London-based analyst said the Cobar and Lomas Bayas mines together could fetch less than $300 million as they are very small.

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