Base Metals Weekly Round-Up: Iron Ore Prices Plunge

- August 9th, 2019

What happened in the base metals space this week? Here’s a look at the top stories covered by the Investing News Network.

After spending most of the summer on a major high, iron ore prices fell below the US$100 per tonne mark this week.

While most base metals faced a bumpy week, iron ore has hit a major snag in the last 10 days. Closing at US$120.02 on July 31, the metal reached a low of US$96.56 by Wednesday (August 7). As of 1:50 a.m. EDT on Friday (August 9), the base metal had fallen even further to US$92.54.

Elsewhere, on the London Metal Exchange (LME), copper attempted to rally from the previous week’s downward trajectory. Between last Monday (July 29) and this week’s start (August 5), the commodity fell by US$300 to US$5,646 per tonne. The red metal spent the week trying to scrape itself together, eventually managing to grow to US$5,722.50 by Thursday (August 8).

Meanwhile, zinc took a midweek dive after peaking at US$2,327 per tonne on Tuesday (August 6) to land at US$2,256 by Wednesday. It ended the week in the green, however, as it grew to US$2,271 by Thursday.

After hitting its weekly low on Wednesday at US$14,735 per tonne, nickel skyrocketed on Thursday to reach US$15,490 per tonne.

Making steady movement upwards this week was lead; after starting Monday at US$1,938.50 per tonne, the commodity grew to US$2,069 by Thursday.

Top base metals news stories

1. Mincor Locks Down Nickel West Deal with BHP

Mincor Resources (ASX:MCR,OTC Pink:MCRZF) has agreed on an ore tolling and concentrate purchase agreement with BHP’s (ASX:BHP,NYSE:BHP,LSE:BLT) Nickel West division.

While a term sheet was originally announced in March, the two companies finalized and signed a binding agreement this week. Mincor originally held a 20 year agreement with BHP Nickel West to process nickel sulfide ore at the Kambalda nickel concentrator, which expired in February.

With the new agreement in place, the company now has the right to process up to 600,000 tonnes of nickel sulfide ore per year at Kambalda. The nickel concentrate produced will then be sold to BHP Nickel West to be downstream processed at the Kalgoorlie nickel smelter and Kwinana nickel refinery.

2. Venturex Signs AU$100 Million Funding, Offtake Deal with Trafigura

Venturex Resources (ASX:VXR,OTC Pink:VTEXF) has received a AU$100 million boost from Trafigura to develop the Sulphur Springs copper-zinc project in Western Australia.

The funding, announced this week, comes in the form of a senior debt facility set to span four years. According to Venturex, the company intends to repay the facility by supplying Trafigura with future copper and zinc concentrate produced from Sulphur Springs.

Alongside the funding agreement, the two companies have entered an offtake agreement whereby Trafigura will receive life-of-mine production for the first 11 years that Sulphur Springs is in operation. After 11 years, Trafigura will receive 50 percent of annual concentrate produced at the project.

3. Centaurus Weighs Asset Swap with Vale for Jaguar Nickel Project

As Vale (NYSE:VALE) continues to pick up the pieces in Brazil, Centaurus Metals (ASX:CTM) is looking to acquire its Jaguar nickel sulfide project in the country’s Carajás mineral province.

This week, Centaurus announced that it has entered into a binding call option agreement to acquire Jaguar through an asset swap arrangement. Assuming Vale’s board okays the transaction, Centaurus will have 30 days after the approval to acquire Jaguar in exchange for its Salobo West copper-gold project, also located in Brazil.

Approval from Vale’s board is expected to take place at the end of August, with Centaurus calling the deal a “transformational acquisition.”

Also in the news

In Minnesota, the state’s natural resources department denied a request from environmental groups to reevaluate permits granted to PolyMet Mining (TSX:POM,NYSE:PLM) for its NorthMet copper-nickel project. The company intends to reuse an existing tailings basin previously used in taconite mining; it was found to be environmentally preferable to a greenfield site.

Glencore (LSE:GLEN) subsidiary Mopani Copper Mines has allegedly closed two shafts at its Nkana mine in Zambia. While the decision has reportedly led to the loss of 1,400 jobs, a statement from Mopani retrieved by Reuters claims that the move will allow the company to focus funds on completing other expansion projects.

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

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