Archive | Copper

Freeport cuts copper production targets after Indonesia spat – by Neil Hume (Financial Times – April 25, 2017)

Freeport-McMoRan, the world’s largest publicly traded copper company, has cut its production forecasts following a stand-off with the Indonesian government stop exports from its Grasberg mine banned.

The Arizona-based miner company had previously expected to sell 4.1bn pounds of copper this year, a figure it has now revised to 3.9bn after Jakarta banned shipments from Grasberg, the world’s second biggest copper mine.

The new guidance was revealed in a trading update that saw Freeport report adjusted net income of $220m for the three months to the end of March, against a loss of $196m a year ago when commodity prices were much lower. Continue Reading →

Rio cuts copper output target after problems at giant mines – by Neil Hume (Financial Times – April 20, 2017)

Rio Tinto has cut production guidance for copper by 12 per cent following problems at two giant mines where it is involved in joint ventures, and reported lower than expected output from its flagship iron ore business because of bad weather.

The Anglo Australian mining group had previously predicted it would mine between 525,000 and 665,000 tonnes of copper this year.

But in a trading update late on Wednesday, Rio said it now thinks it will produce between 500,000 and 550,000 tonnes because of supply disruptions at the world’s two biggest copper mines — Escondida in Chile and Grasberg in Indonesia. Continue Reading →

STUDY: MINING INDUSTRY JOBS WORTH MORE THAN TOURISM – by John Myers (Hibbing Daily Tribune – April 20, 2017)

DULUTH — With claims by some mining critics that tourism is a more sustainable option than copper mining for northern Minnesota, and with the federal government mulling a moratorium on new mining near the Boundary Waters, industry officials have fired back with a new study that claims mining jobs still drive the regional economy.

Mining supporters say the study offers proof that mining and tourism can co-exist but that tourism doesn’t stand up to mining in terms of economic impact. Mining Minnesota, the copper-nickel industry trade group in Duluth, paid for and released a report Tuesday, April 18, by the Praxis Strategy Group that covered Cook,

Lake, St. Louis, Carlton, Koochiching and Itasca counties in northeastern Minnesota and Douglas County in Wisconsin. The study found current iron ore mining and directly related industries such as railroads and shipping employ 5,140 people earning $419 million annually, when all of the region’s operations are open and running. Continue Reading →

COLUMN-Fund managers down but far from out in the copper market – by Andy Home (Reuters U.S. – April 19, 2017)

LONDON, April 19 Copper’s bull momentum from the start of the year is fading as the disruption premium from supply hits at the world’s two largest mines unwinds and broader risk-off turbulence also joins the mix.

Three-month copper on the London Metal Exchange (LME) slid through $5,600 on Tuesday to hit $5,568.50 a tonne, its lowest level since January. And though it staged a small bounce on Wednesday morning, at $5,630 copper’s year-to-date gain stands at a little more than 2 percent, having been up almost 11 percent in February.

On the supply side, a strike at Escondida in Chile has ended, albeit after a longer than expected 43 days, while a temporary compromise on export shipments should allow the Grasberg mine in Indonesia to ramp up towards more normal operating rates. Continue Reading →

Editorial: Debt-heavy Codelco forecasts muted growth – by John Cumming (Northern Miner – April 12, 2017)

Two highlights of the copper calendar — Cesco Week and CRU’s World Copper Conference, both held in Santiago, Chile in early April — have come to a close, with attendees reporting a sense of cautious optimism among the world’s top copper producers and refiners, as supply growth starts to level off and copper prices modestly rebound.

Santiago-based Cesco (from Centro de Estudios del Cobre y la Minería, or Centre for Copper and Mining Studies) was founded in 1984 as a private, non-profit organization, and describes itself as “independent and plural … promoting social legitimacy and confidence in Chile’s mining industry as a development engine,” and seeks to monitor and provide “information and quality analysis in novel formats.” Each year the organization puts on Cesco Week, including the Cesco Dinner, as well as the similar Asia Copper Week in Shanghai.

While much talk in the copper community over the first quarter focused on short-term supply disruptions at the world’s three largest copper mines — Escondida in Chile, Grasberg in Indonesia and Cerro Verde in Peru — the presentations in Santiago tackled some of the industry’s longer-term problems, including lower head grades, deepening mines with harder rock, water shortages and sociopolitical challenges. Continue Reading →

Indonesia eyes truce with Freeport as losses mount for both sides – by Fergus Jensen (Reuters U.S. – April 12, 2017)

JAKARTA – Losses amounting to hundreds of millions of dollars appear to be pushing the Indonesian government and mining giant Freeport McMoRan to resolve a row that has crippled operations at Grasberg, the world’s richest copper mine, for three months.

Freeport says it has lost revenue of about $1 billion since the export of copper concentrate from Grasberg was halted on Jan. 12 under new rules issued by the government. The government has lost millions of dollars in royalties and is worried about layoffs and a slowing economy in the restive Papua region, where the giant mine is located.

“There’s a lot of grandstanding in public – that, with our economy being close to a $1 trillion a year now, Freeport is a small matter,” said a senior Indonesian government official, who estimated the lost royalties and taxes from the mine at about $1 billion a year. Continue Reading →

Freeport Expects to Reach Indonesia Export Deal `Imminently’ – by Laura Millan Lombrana and Danielle Bochove (Bloomberg News – April 6, 2017)

(Bloomberg) — Freeport-McMoRan Inc. expects to have permits in place “imminently” to resume exports of semi-processed copper from Indonesia for the next six months, allowing the miner to focus on fleshing out a long-term agreement to stay in the country.

“We have been working with the government on this approach, but it has not yet been formally documented,” Chief Executive Officer Richard Adkerson said in an interview in Santiago on Wednesday. “We understand that’s to happen immediately and that there are no areas of controversy in the documentation.”

Indonesian authorities said on Tuesday they issued a mining license, that will allow Phoenix-based Freeport to resume exports of copper concentrates once the trade ministry signs off, which Adkerson said is a administrative matter that doesn’t involve additional negotiation. Continue Reading →

Palm-fringed indecision: Votes loom on the future of New Caledonia and Bougainville (The Economist – April 6, 2017)

The first Pacific island may choose to stay part of France, but the second could split from Papua New Guinea

IT HAS been six years since the birth of the world’s youngest country, South Sudan, in 2011. It may soon have some younger siblings. The Pacific island of New Caledonia is due to hold a referendum on independence from France by November next year; Bougainville, 1,200 miles to the north (see map), is supposed to vote on separation from Papua New Guinea in 2019.

The timing of the two referendums was fixed decades ago, to defuse long-festering conflicts. But the approach of the appointed time is raising tricky questions about how to word the question on the ballot, who should have the right to vote and what to do once the results are in.

New Caledonia’s secessionist uprising ended in 1988 when leaders of the indigenous Kanaks and French loyalist politicians agreed to hold a vote on independence a decade later. When that deadline arrived, the two sides approved a further delay of 15-20 years. Continue Reading →

The burrowers: copper mine’s fate hints at light at the end of tunnel for Michigan – by Josh MacIvor-Andersen (The Guardian – April 5, 2017)

Greenland, Michigan – The old copper mine entrances dotting the hills of Michigan’s remote Keweenaw peninsula suggest a geological precariousness. It’s the balancing act of all that ancient basalt. You sense the testing of angles and weight.

The pushing of limits. You see the hubris in the dynamited tunnels braced with wooden support beams that seem impossibly feeble. The word “splintered” comes to mind if ever the ceilings were to fail.

At the cold mouth of this particular entrance, gouged into a hill in Greenland, Michigan, there is a robust, grille-like cage cemented into the opening’s circumference, slatted for the bats to go echolocate their dinners, yet stout enough to dissuade the local “copper rats” – the name given to human scavengers searching for mineral scraps to sell for quick cash. The gate is impressive, seemingly impenetrable. But Dave Sarazin, my guide, has the key. Continue Reading →

Chile copper industry urged to adopt sweeping changes – by Barbara Lewis and Mitra Taj (Reuters U.S. – April 4, 2017)

SANTIAGO – The world’s biggest copper producer Chile needs to adopt new technologies and improve labor and community relations in order to maintain its global standing, industry leaders said on Tuesday.

Chile’s copper industry is grappling with falling productivity because much of the country’s best-quality ore has already been mined, although it still accounts for 30 percent of the world’s supply of the metal.

This week Chile hosts the CRU World Copper Conference in Santiago, where the nation’s declining ore grades and a dispute at its biggest mine, Escondida, are offsetting relief that copper prices have recovered from the lows of around $4,300 a tonne a year ago. They remain below $6,000. Continue Reading →

Indonesia Allows Exports From Freeport Mine in Stop-Gap Deal – by Yoga Rusmana and Eko Listiyorini (Bloomberg News – April 4, 2017)

Indonesia has issued a temporary mining license to Freeport-McMoRan Inc.’s local unit that will allow the company to resume concentrate exports from the world’s second-largest copper mine after a gap of about 12 weeks.

The permit for Grasberg is valid for eight months from the time that the producer was first offered a special mining license or IUPK in February, Teguh Pamudji, secretary-general at Indonesia’s Energy and Mineral Resources Ministry, told reporters in Jakarta on Tuesday. The government will continue talks with Freeport on a long-term financial stability pact, he said.

A Phoenix-based Freeport spokesman, Eric Kinneberg, reiterated Tuesday that talks to resume exports are continuing. “We are progressing constructive discussions with the government that would enable PT-FI to resume concentrate exports while retaining our contract until a mutually satisfactory replacement agreement is completed,” he said in an email, referring to the Indonesian unit by its initials. Continue Reading →

Anglo American aims for copper expansion in Peru, but not yet – by Barbara Lewis and Felipe Iturrieta (Reuters U.S. – April 4, 2017)

SANTIAGO – Anglo American could begin to expand copper capacity starting in Peru in 2018 after another year without added supplies as the company remains focused on cutting costs, the head of its copper division said in an interview. Copper prices jumped 18 percent in 2016 and have been supported so far this year by strikes and a lack of new capacity.

“All of that has kept the market in almost a neutral position where there wasn’t a surplus,” said Hennie Faul, Anglo American’s chief executive officer for copper. “I couldn’t call it a tight position, but at least it got the prices to stabilize.”

Given a broadly stable copper market and a continued need to shore up the balance sheet following the commodities market crash of 2015 and early 2016, Faul said the company would only look at copper expansion once a decision had been made around year-end on restoring dividends. Continue Reading →

Commodity hedge fund Blenheim sees upside in copper, zinc -by Melanie Burton (Reuters U.S. – March 31, 2017)

Copper and zinc are the two standouts among a brightening outlook for base metals, with supply constraints and China-driven demand set to lift prices in coming months, U.S. commodity hedge fund Blenheim Capital Management said.

After a near six-year downturn that bottomed early last year, industrial metals are being driven more by supply and demand fundamentals than global monetary trends, base metals analyst Ingrid Sternby told Reuters in a rare interview.

The famously private Blenheim sees interest in commodities finally picking up and Sternby said there’s now “a good story to tell.” “We have April ahead of us where usually demand is better. I’d say there is fair chance that we are going to see some better price action ahead. Fundamental stories are promising and I would expect more money coming into the sector,” she said. Continue Reading →

Copper capped by hidden supply surge – by Andy Home (Reuters U.S. – March 29, 2017)

LONDON – Has the copper price rally which started so spectacularly late last year run out of momentum? The London Metal Exchange (LME) price, basis three-month delivery, hit a nine-month high of $6,204 per tonne last month, since when it has churned in a broadly directionless range below the $6,000 level.

This is all the more surprising given the severity of the supply-side hits that have been grabbing the headlines. The strike at the world’s largest mine, Escondida in Chile, has ended. But at 43 days it was longer than expected and, factoring in a gradual ramp-up to full production, is going to translate into some 230,000-240,000 tonnes of lost output, analysts reckon.

The world’s second largest mine, Grasberg in Indonesia, is operating at only 40 percent of capacity due to an increasingly acrimonious dispute between operator Freeport McMoRan and the Indonesian government. Continue Reading →

Barrick, Goldcorp team up to develop one of world’s largest gold deposits in Chile – by Cecilia Jamasmie ( – March 28, 2017)

Canada’s Barrick (TSX, NYSE:ABX) and Goldcorp (TSX:G) (NYSE:GG), the world’s No.1 and No.3 producers of the precious metal by value, are teaming up to develop projects in northern Chile, particularly Cerro Casale, one of the world’s largest gold-copper deposits.

As part of the agreement, Barrick has sold a 25% stake in Cerro Casale to Goldcorp, which will result in a 50-50 joint venture focused on building gold mines in Chile’s prolific Maricunga belt.

The move, a fresh sign that miners are moving from cost-cutting to expanding operations and investing in exploration, also prompted Goldcorp to acquire Exeter Resource Corporation (TSX:XRC) for about $250 million. The takeover makes of Goldcorp the sole owner of the Caspiche gold-copper project, conveniently located only 10 km north of Cerro Casale. Continue Reading →