Base Metals Weekly Round-Up: New Mines and Low Prices

- February 15th, 2019

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

In the news around the world this week, US President Donald Trump finally got his wall funding — though it’s a victory he had to sidestep Congress and declare a “National Emergency” to achieve.

What does that mean for markets? Well, no shutdown as a budget bill has been signed and Trump won’t spit the dummy (for now).

Elsewhere, the Australian Government lost votes in both houses of parliament this week over refugee laws — raising the chance of an early (or earlier) election — though voters are tipped to go to the polls in May.

In the commodity markets, copper had a dip in the middle of the week, but by Thursday (February 14) was tracking higher over, up to US$6,178 a tonne.

Zinc had a dip too, and despite a slight recovery on Thursday was still below its Monday starting price of US$2,646 a tonne at US$2,634.5.

Nickel was much the same, though with less impressive recovery, trading down 1 percent.

Base metals top news stories

In top news this week, the long-awaited Cobre Panama project in Central America has roared to life just in time to feed a hungry copper market, Canada’s Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) posted a big drop in profits, and in Southeast Asia Myanmar Metals (ASX:MYL) is showing off a new resource estimate for the Bawdwin JV.

1. First Quantum’s Cobre Panama Comes to Life

First Quantum (TSX:FM,OTC Pink:FQVLF) has tamed the rainforest, with the company announcing this week that its mammoth Cobre Panama copper project in Central America has been slowly coming to life as of February 7, with a phased ramp-up of operations through 2019.

The new mine has the potential to produce 380,000 tonnes of copper a year.

2. Low Copper Prices Weigh Down Teck’s Q4 Profits

Canada’s Teck Resources has reported a significant drop in fourth-quarter profits compared to 2017, with the diversified company pointing to falls in copper, zinc and oil prices through 2018.

The decline represents a 41-percent fall in profit off the back of lower commodity prices, though Teck said that overall 2018 was “another very good year” for the company in regards to overall earnings and project development with the Quebrada Blanca phase 2 project moving forward thanks to a deal with Sumitomo Metal Mining (TSE:5713,OTC Pink:SMMYY) in a US$1.2 billion transaction.

3. Myanmar Says Bawdwin is Now Largest Primary Lead Resource

Myanmar Metals has successfully boosted the indicated mineral resource estimate for its majority owned Bawdwin joint venture project by 50 percent.

Bawdwin’s global indicated and inferred mineral resource estimate now sits at 94.2 Mt at 4.2 percent lead, 107 g/t silver, 2.1 percent zinc and 0.2 percent copper. According to the company, the project now hosts the largest primary lead resource in the world and the ninth-largest silver resource globally.

In other base metals news

While Taseko Mines (TSX:TKO,NYSEAMERICAN:TGB) reported a financial year loss for 2018 earlier in the week, on Friday (February 15) the company announced it had acquired fellow Canadian Yellowhead Mining (TSXV:YMI) and its Harper Creek project. Taseko said it would now spend the coming months kicking the tires of its new purchase in a bid to improve its economics.

In Brazil, the government has set its sights on mining giant Vale (NYSE:VALE) with a plan to ‘re-privatize’ the company, claiming that because pension funds controlled by the government have large stakes in Vale, Vale is government-controlled. According to reporting by Bloomberg, state-run funds would be forced out of the company, but it’s not yet clear how the government plans to do that.

In Peru, the state environmental watchdog ruled out a tailings spill at Southern Copper’s (NYSE:SCCO) Cuajone operations, saying that nothing from the tailings facility had seeped into the environment despite announcing an investigation earlier in the week.

In Papua New Guinea’s autonomous region of Bougainville, a change to the mining act has been rejected, meaning former operator of Panguna, Bougainville Copper (ASX:BOC) has held on to the currently shuttered project — formerly one of the largest gold-copper mines in the world.

In Cuba, Sherritt International (TSX:S) reported its fourth quarter and year-end results for 2018, detailing higher production of nickel and lower production of cobalt.

The Norwegian Government gave the green light to a disputed copper mine within the Arctic circle this week, going against the wishes of indigenous and fishing communities. The Nussir copper mine decision is being touted as a litmus test for developing the resources industry in the harsh arctic conditions, so this story is one to keep an eye on in coming years.

Finally, over in the land down under, the South Australian Government has declared BHP’s (ASX:BHP,NYSE:BHP,LSE:BLT) Olympic Dam 75-percent expansion plans a major development — a classification that raises the already high-profile projects standing.

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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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