Base Metals Weekly Round-Up: Green Lights, Bans and Discoveries

Base Metals Investing

This week was all about copper, from steps backward and forward for miners in the Democratic Republic of Congo to milestones in Romania.

In the base metals space, some miners took steps forward with their projects while other familiar faces took steps backward thanks to problematic jurisdictions.

Around the world, the news cycle was dominated by the US president’s bad week in Europe and Brexit’s even worse week, as the EU-UK negotiations drag onward and downward for both parties. While a deal would provide certainty to business in the UK, it’s a safe bet there will be chaos anyway.

Looking at commodity prices, copper enjoyed a week of upward-trending prices — though not by much — with a 1.7 percent increase in value from Monday (November 12) to Thursday (November 15), reaching US$6,187 by the second last day of the week.

For nickel, the much vaunted battery metal is still hitting year-long lows this month, though as of this week was also slightly up on its Monday value, having begun at US$11,280 and reaching US$11,335 by Thursday.

Zinc had a nice big jump in value on Thursday, after starting at US$2,545 on Monday the ‘least-loved’ base metal was at US$2,645 on Friday— a 3.9 percent jump.

Base metals top news stories

This week was all about copper, from steps backward and forward for miners in the Democratic Republic of Congo (DRC) to milestones in Romania.

1. Katanga Bang: DRC Miner Hit With Copper Export Halt

Our first top story is a little bit of a blast from the past, returning to Glencore’s (LSE:GLEN) Katanga Mining (TSX:KAT)— which revealed that it’s being prevented from importing and exporting any goods associated with its African copper-cobalt operations due to alleged failure to pay duties on copper exports in late 2014 and early 2015.

In its Q3 2018 financial report, Katanga said that the customs authority in the Democratic Republic of the Congo  had been preventing Katanga’s subsidiary, the Kamoto Copper Company (KCC), from moving goods since November 9.

Shares in Katanga Mining were already doing poorly as markets absorbed news it was being prevented from exporting cobalt due to high levels of uranium in the ore.

The DRC has since ‘temporarily’ lifted the suspension on Katanga.

2. Ivanhoe Feathers Kamoa Nest with More Drill Discoveries

Staying in the DRC, Canada’s Ivanhoe Mines (TSX:IVN) had much happier news for shareholders, announcing even more discoveries at its Kamoa-Kakula project.

Drilling at the project has been continuing through from the third quarter of 2018, with the company saying it’s successfully delineated two new continuous corridors of shallow copper mineralization containing “high-grade copper.”

Co-chairman of Ivanhoe Robert Friedland said that the exploration success of the drill program gives the company more options for planning at Kamoa-Kakula, and also “bode well for the potential for further success right next door” at Western Foreland, where the Makoko copper discovery was announced early last month.

3. Bucharest Gives Euro Sun the Thumbs Up for Rovina

For our last top story of the week we’re taking a trip to Eastern Europe, where Euro Sun Mining (TSX:ESM) has been waving around its freshly minted and rare mining license for its Rovina copper-gold project.

In a Monday announcement, Euro Sun said that the Prime Minister of Romania had signed off on the project last week, in a move seen by the company as a huge milestone for the formerly communist eastern European country. Euro Sun’s CEO said that Euro Sun was the first non-state owned entity to have a ratified mining license in Romania.

With the mining permit in hand, Euro Sun now has the task of completing an environmental and social impact assessment, and is also in the process of working on a feasibility study that will inform the company on whether it should proceed with construction.

In other base metals news

In Arizona, Resolution Copper could find itself the receiver of a number of strongly-worded letters from members of the local community, after it demolished a historic copper smelter stack that it said was a danger as it developed its West Plant property, which is due for completion in 2020.

In Australia, derailing trains appear to have become a new pastime with Mineral Resources (ASX:MIN) the victim this time. The company reported that 30 empty cars came off the tracks in Western Australia after flooding undermined the rails. Nobody was injured.

Sandfire America (ASX:SFR) reported this week that its Black Butte copper project in Idaho will be delayed as it must construct a pond to store treated wastewater in order to meet state environmental regulations.

In Europe, Nyrstar (EBR:NYR) is in a spot of bother, and according to analysts is on its way towards a debt restructuring. As Europe’s largest zinc smelter, the base metals low, low prices are an almighty hint as to why the company may be in trouble.

And finally, Australia’s Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) has entered the fray for a slice of Teck’s (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) Quebrada Blanca project in Chile as the company seeks to increase its copper assets in order to take advantage of what the industry believes is a rosy outlook.

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

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