Base Metals Weekly Round-Up: Settlements and Discoveries

This week in base metals, it was mineral resource estimates galore, drama at the Spence mine in Chile, a major discovery in South Australia and more. The Investing News Network explores the top stories below.

Outside of base metals, world news was dominated by the G20 kicking off in Buenos Aires — with all eyes on US President Donald Trump and Russian President Vladimir Putin while the trade war bubbles.

Meanwhile, for all the mining news out of Australia, global news outlets latched onto a giant cow.

With that smooth transition into mining, global economic thermometre copper is looking to be ending November on the up, reaching US$6,280 per tonne by Thursday (November 29), having started the week at US$6,245, and November at US$6,068 — a total monthly gain of almost 3.5 percent.

Zinc wasn’t as lucky — it’s down this week and is down this month. As of Thursday, it was trading at US$2,552 a tonne, while on Monday (November 26) it was at US$2,558 and on November 1 it was at US$2,584 — a slow decline when looked at here but it’s more of the same decline in value the base metal has suffered through the second half of 2018, despite falling inventories.

Wannabe battery metal nickel had a better week, but November as a whole has been a disappointment. On Thursday, it was trading at US$10,885 per tonne — up over 1 percent on Monday, but down 5.57 percent on November 1, when the base metal was trading at US$11,550 per tonne on the LME.

Base metals top news stories

In top news this week, Canada’s Imperial Metals (TSX:III) has announced it’s going to get a C$108-million settlement as part of a lawsuit over the collapse of the tailings dam at its Mount Polley mine in 2014, while in Australia, Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) has opened its wallet for the Koodaideri iron ore replacement mine, and finally BHP (ASX:BHP,NYSE:BHP,LSE:BLT) has found some copper in South Australia.

1. Imperial Metals Gets C$108-million Settlement

Canada’s Imperial Metals has reported that it’s due to receive a hefty payment in relation to the 2014 collapse of the tailings dam at its Mount Polley copper mine in British Columbia.

“An action for damages arising out of the August 4, 2014 failure of the perimeter embankment at the Mount Polley mine has been settled among all parties to the action,” said the company.

Imperial Metals will receive net payments of around C$108 million, which will be a welcome addition to its books after posting a loss of C$28 million in Q3.

The 2014 dam failure saw millions of tonnes of tailings flood into nearby waterways, which a report found was a result of a design flaw in the dam wall, leading to Imperial suing two engineering firms associated with its construction in 2016.

2. Rio Opens its Wallet for Koodaideri Iron Mine

The Koodaideri iron ore mine in the Pilbara has been given the green light to go ahead by its owner Rio Tinto, which has formally approved AU$3.5 billion in spending for the massive project to proceed.

Last Thursday (November 27), the company said that Koodaideri was to be its most technologically advanced mine when it came online in 2021.

Automation is the name of the game when it comes to Koodaideri’s ‘most advanced mine’ label, with Rio CEO J-S Jacques describing it as a “game changer”.

Construction at the 43-million-tonne per year mine will begin in 2019.

3. BHP Reports New Early Stage Copper Find Near Olympic Dam

Through a copper exploration program, BHP has discovered a potential new iron oxide-copper-gold (IOCG) mineralized system 65 kilometers southeast of its Olympic Dam operation in South Australia.

According to the company’s Tuesday release, four diamond drill holes covering 5,346 meters intersected copper, gold, uranium and silver mineralization in IOCG style.

Assay results show downhole mineralization intercepts that range between 0.5 and 6 percent copper with associated gold, uranium and silver.

BHP explains that its exploration efforts are at an early stage, and that there isn’t enough information currently to assess the size, quality and continuity of the mineralized intersections.

In other base metals news

Exploring other stories in base metals, in Mexico, copper companies are reportedly suffering a sell-off as they register concerns over the policies of incoming president-elect, Andrés Manuel López Obrador.

Staying in Mexico, Grupo Mexico (BMV:GMEXICOB) could have a headache to deal with come next week, with former workers reportedly planning to block mine access at its Buenavista copper mine over collective bargaining.

Still on copper, during an investor tour of its assets in the Americas, Anglo American (LSE:AAL) announced it would be increasing its guidances for the next few years with the Los Bronces and Collahuasi mines in Peru upping production to 2021 before Quellaveco comes online in 2022 to turbocharge the numbers.

Meanwhile, the Eurasian Resources Group announced this week it had secured electricity supply for its Frontier copper operations in the Democratic Republic of the Congo, where it has the capacity to treat 10 million tonnes of copper sulfide annually.

Finally for the red metal (there was a lot happening), BHP did have some bad news this week, reportedly dealing with a short-lived strike at its Spence operations in Chile.

In non-copper news, private company Tacora Resources announced this week that it had secured all the financing it needed to restart the Scully iron ore mine in Newfoundland and Labrador, earning itself kudos from local politicians.

Meanwhile, China’s steel industry is reportedly entering a bear market as margins tumble and the trade war grinds on, making steel mills reassess cheaper iron ore offered by Australian operators.

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