Base Metals Weekly Round-Up: Northern Dynasty Gets a Boost

Last week the Canada-based, America-focused company Northern Dynasty (TSX:NDM,NYSEAMERICAN:NAK) got itself a nice late Christmas present when it was leaked that the US Army Corps of Engineers (USACE) was circulating a draft final environmental impact statement (EIS) on the Pebble project in Alaska.

The company, which enjoyed a boost in its share price in the days following, said that the leaked EIS executive summary showed that the proposed 613,000 metric ton per year copper–gold project in Alaska could coexist with existing fisheries nearby, the local environment and local communities.

The progress being made on the EIS is in stark contrast to the project’s last few years in the spotlight, as it has been mired in controversy over environmental concerns, an attempted veto by the Obama-era Environmental Protection Agency, multiple partners dropping out of the project and varying degrees of local opposition.

In other news in the base metals world, the coronavirus (COVID-19) outbreak in China has continued to claim lives and slow the Chinese economy.

As of February 14, the official death toll of COVID-19 stands at 1,383 according to the World Health Organization, with over 49,000 laboratory-confirmed cases.

Efforts to contain the outbreak within mainland China are having a marked flow-on effect on industries there, with quarantines making it difficult for metals refineries to move acid by-product produced by their smelting activities.

On Thursday, Henan Yuguang Gold and Lead reported that it was shuttering 50 percent of its zinc smelting capacity as a result of an overburden of sulfuric acid that it was unable to ship to customers.

Yuguang Gold and Lead has an annual zinc smelting capacity of 300,000 metric tons, copper capacity of 150,000 metric tons and lead capacity of 400,000 metric tons — though it also said that for now only its zinc output was being affected.

Mining giant Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) reported it was being affected by Chinese authorities’ prior efforts to contain COVID-19, with shipments of copper from Mongolia into China being delayed as customs and border authorities work on re-establishing crossings between the two countries.

In other news from around the world, Barrick Gold (TSX:ABX,NYSE:GOLD) was playing in base metals when its CEO, Mark Bristow, told Reuters that he saw no competition for his company’s bid to acquire the Grasberg copper-gold mine in Indonesia, which is currently the flagship asset of Freeport McMoRan (NYSE:FCX).

Looking at prices, copper appeared to have hit its floor price and was trading at US$5,715.50 per metric ton on the London Metal Exchange on Thursday (February 13) — up from its Monday (February 10) value of US$5,659, though not by much.

The story was similar for zinc, which appeared to have pulled itself up of its 2020 low, reaching US$2,155 per metric ton.

Nickel also shared a copper-like recovery, at US$13,060 per metric ton, while lead posted the most dramatic percentage recovery at US$1,876 from its Monday (and 2020) low of US$1,807.50.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.