Base Metals Weekly Round-Up: Ivanhoe Strikes Copper (Again)

Base Metals Investing

In the news this week, Ivanhoe Mines keeps it busy in the DRC with the Makoko copper discovery, INN reports on Nevada Copper’s impact on a small Nevada city and Rio Tinto gears up to plough even more money into iron ore in Western Australia.

Another week of big news, and not just in the mining sector.

In the US  not all the news is being drowned out by the supreme court  jobs numbers are looking good, with the Labour Department releasing a report showing unemployment is well down in America.

It’s looking like the whole world is minting their own version of Donald Trump, with Brazil’s Jair Bolsonaro, a far-right candidate, so far leading the pack of candidates towards the upcoming presidential elections there.

In the base metals space, prices are looking positively buoyant compared to previous weeks (and months), with copper staying well above US$6,000 a tonne — notching US$6,309 by October 4 after a week of gains.

Zinc is also not only up, but showing resilience towards falling back down in value again, with the metal sitting at US$2,695 by Thursday (October 4) — it hasn’t fallen below US$2,600 since October began, though that’s not saying much.

While nickel started the week well down on recent heights, by Thursday it was almost recovered, sitting at US$12,760.

Base metals top news stories

1. Ivanhoe Notches Third Major DRC Copper Project

Fresh from the closing of the deal that makes Canadian Ivanhoe Mine’s (TSX:IVN) almost 20-percent Chinese owned, the company announced on Monday (October 1) that it had struck copper yet again in the Democratic Republic of Congo (DRC).

The Makoko project, to the west of the existing Kamoa-Kakula project in the Western Foreland exploration licenses, is described as almost identical to its neighbouring project — except it carries the distinction of being 100-percent Ivanhoe owned, while Kamoa-Kakula is a joint venture with Zijin Mining (HKEX:2899).

Ivanhoe said that Makoko was “the first of multiple high-potential target areas” to be tested in the area and that an initial resource estimate was expected by the the end of 2018.

Co-chairman of the company Robert Friedland announced his company was all-in in the DRC despite objections from other companies and investors over the newly applied mining code, saying that “while some investors are focused on short-term issues such as the DRC mining code revisions and the upcoming presidential election, Ivanhoe’s philosophy is to think big and think long term,” he declared.

2. Pumpkin Hollow Puts Spring in Community Step

Following on from a site visit to Nevada Copper’s (TSX:NCU) Pumpkin Hollow project near the city of Yerington, Nevada, read about what community leaders think of having a giant mining project on their doorstep.

The short story is that they are happy with the development, and keen for the economic benefits of having new jobs, new workers, and new life in their ‘sleepy’ little town.

In August, Nevada Copper announced it would be going ahead with construction at the underground project — the smaller of the two, but which would have a capacity of 5,000 tonnes of throughput per day grading 1.74 percent copper equivalent for an average annual copper production of 50 million pounds over a 13.5 year mine life.

The announcement came as welcome news to the town, which was described by its mayor George Dini as having mining as its soul in previous decades.

3. Rio and Friends Commit $1.55 Billion to Pilbara Iron Ore Operations

Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO), in a combined effort with two of its joint venture partners, will invest $1.5 billion in two iron ore projects in the Pilbara region of Western Australia.

Along with its joint venture partners, Mitsui (TSE:8031) and Nippon Steel & Sumitomo Metal (TSE:5401), Rio Tinto will invest $967 million to develop the Mesa B, C and H deposits at Robe Valley, and $579 million to develop deposits C and D at the existing West Angelas operation.

Robe Valley and West Angelas are two projects that form part of the Robe River joint venture in Western Australia’s Pilbara region. Rio owns a 53-percent stake in the joint venture, while Mitsui owns 33 percent and Nippon Steel & Sumitomo Metal owns 14 percent.

In other base metals news

In London, Indian industrialist Anil Agarwal was successful in his bid to buy out Vedanta Resources and de-list the company from the LSE, in what he described as a bid to simplify the sprawling company’s structure. The London arm of Vedanta was much smaller than the company’s Indian operations.

Good news from BHP (ASX:BHP,NYSE:BHP,LSE:BLT) in Australia — its Nickel West smelting operations only suffered minimal downtime following a fire at its Kalgoorlie-Boulder facility last week. Operations at the smelter restarted on October 3.

Staying with BHP, the company has been reported as seeing growth opportunities in China’s Belt Road Initiative (BRI) in the copper sector, with Reuters reporting the company believed the extra 1.6 million tonnes of refined copper needed to 2023 to support the BRI was ‘conservative’.

In Africa, PwC released a report revealing that the South African mining sector was being held back by the precious metals sector, even while other sectors surged ahead – local industry ended the period with a net loss.

In Zambia, proposed changes to that countries mining charter are being warned as having the potential to ‘ruin’ the economy.

Finally, in South America, there are reports Vale (NYSE:VALE) is getting ready to approve the US$1 billion expansion of its Salobo copper mine in Brazil from 200,000 tonnes to 250,000 tonnes annually.

Don’t forget to follow us @INN_Resource for real-time updates!

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

Editorial Disclosure: Nevada Copper is a client of the Investing News Network. This article is not paid-for content.

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