Base Metals Weekly Round-Up: Iron Ore Cools Off

Most base metals found themselves trending downwards this week, with iron ore notably dropping from its month-long perch near the US$120 per tonne mark.

Though the commodity stayed strong through the week, Friday (August 2) saw the metal dive 5.28 percent; it had hit US$106.40 by 2:15 a.m. EDT.

Elsewhere, on the London Metal Exchange (LME), copper gradually slipped through the week. The red metal started Monday (July 29) at US$5,949 per tonne only to fall to US$5,875.5 by Thursday (August 1).

While zinc had a stable start to the week at US$2,471 per tonne, it dropped to US$2,395 by Thursday.

Back on the rise this week was nickel, which started Monday just below the US$14,000 per tonne mark. It would go on to peak at US$14,355 on Wednesday (July 31), but later cooled to US$14,285 on Thursday.

Seeing red all week was lead; after starting the week at US$2,029 per tonne, the commodity had fallen to US$1,973.50 by Thursday.

Base metals top news stories

1. Northern Dynasty Moves as EPA Withdraws Restrictions

Northern Dynasty Minerals (TSX:NDM,NYSE:NAK) scored a major win this week when the US Environmental Protection Agency (EPA) withdrew restrictions related to mining in Alaska. The decision has restarted movement on the company’s Pebble copper-gold project.

The project, set to be a gargantuan asset in Bristol Bay, has faced a great deal of environmental opposition through its developmental journey, including a falling out with First Quantum Minerals (TSX:FM,OTC Pink:FQVLF), which had entered an option agreement to collaborate on Pebble in 2017.

Citing an inability to reach an agreement on the deal, the two companies parted ways on Pebble in 2018, with First Quantum acknowledging the project’s “environmental and social sensitivity.”

2. Turquoise Hill’s Checkbook Takes Hit on Oyu Tolgoi Issues

As the company faces delays and cost hikes at the Oyu Tolgoi copper mine, Turquoise Hill Resources (TSX:TRQ,NYSE:TRQ) saw losses of US$736.7 million over Q2.

The financial blow to the company was cushioned by revenues of US$382.7 million, which represents a 12 percent increase from Q2 2018. However, the loss still marks a stark contrast to Q2 2018’s profits of US$204.4 million.

According to the company, an impairment charge of US$0.6 billion at Oyu Tolgoi’s cash-generating unit was a primary cause of the losses.

3. Independence Group’s Nova Exceeds Yearly Nickel Output Guidance

Independence Group’s (ASX:IGO) Australia-based Nova nickel-copper asset has knocked it out of the park by surpassing its quarterly and yearly production guidance.

Nickel guidance for the 2019 fiscal year (FY19) from Nova was docketed at 27,000 to 30,000 tonnes, while copper was in the 11,000 to 12,500 tonne range.

However, according to the company’s latest quarterly report, the project exceeded expectations by producing 30,708 tonnes of nickel and 13,693 tonnes of copper over the year. Quarterly production came in at 7,906 tonnes of nickel, while copper saw 3,462 tonnes.

Also in the news

Hudbay Minerals (TSX:HBM,NYSE:HBM) hit another roadblock regarding its Rosemont project in Arizona when a court ruling halted the company from moving forward on construction. While Hudbay plans to appeal the decision, the company’s share price dropped over 20 percent following the announcement.

Glencore (LSE:GLEN) released its half-year report for 2019, where copper production came to 663,000 tonnes, a 5 percent decrease from H1 2018. Zinc production totaled 535,900 tonnes, an 8 percent increase, and nickel production reached 55,400 tonnes, an 11 percent decrease.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.