Base Metals Weekly Round-Up: Outlooks, Plans and Strikes

In the news this week, we look back on the big stories of the year and explore sentiments on the year to come in the world of copper.

In macro news from around the world, China’s economy has reportedly slowed due to the ongoing effects of the trade war, in Europe, all eyes are still on the UK and its shambolic Brexit process, while in the US the Mueller investigation is still taking oxygen away from the Trump administration.

Back in the land of commodities, copper gained value of this week; starting on Monday (December 10) at US$6,110 a tonne and reaching US$6,196 a tonne by Thursday (December 13), representing a 1.4 percent increase.

Zinc didn’t move too far this week, dipping to US$2,663 from its starting point of US$2,676, and reaching US$2,684 a tonne by Thursday, making for almost negligible movement percentage-wise.

Its fellow base metal, nickel moved slightly further but not by much, posting a 0.6 percent gain in the LME to reach US$10,795.

Base metals top news stories

This week in base metals news: we published copper outlooks for 2019, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) has big news, and Codelco waves away concerns over workers striking at Chuquicamata.

1. Looking to 2019 in Copper

This week the Investing News Network (INN) published two stories detailing the thoughts and feelings of those who know the copper space best: CEO’s of copper-focused companies, and analysts that live and breathe commodity markets.

In our CEO outlook article, six company leaders share their thoughts, and the general vibe is that copper companies are optimistic for the next 12 months, even if the last 12 weren’t anything to write home about.

Analysts were optimistic too, though with the bad news (sorry) that the investing world is stuck with the trade war for the foreseeable future. Continued growth in copper demand, coupled with a slim pipeline of new projects to replace depleted mines means that analysts predict an increase in value for the red metal though, trade war or no.

2. BHP Clears Yet Another Hurdle in Race to Nickel Supremacy

Mining giant BHP has taken another step towards its goal of being a major player in the battery metals space, with the company reportedly given the green light to go ahead with developing a mine at its Venus nickel deposit in Western Australia.

The Venus deposit is one of multiple targets identified by BHP in August as having the potential to feed into its battery metals ambitions.

The company said that the Western Australian government’s blessing to go ahead with the mine meant it had all the necessary approvals, and it would now being working on access routes to the site for full-scale operations.

3. Codelco: Chuquicamata Unaffected by Disgruntled Unions

Chilean state miner Codelco has said that its Chuquicamata copper mine is operating as normal despite reports that unionized workers there have downed tools and are blocking access as of Thursday (December 13).

A company spokesperson told Reuters that the protests were not getting in the way of day to day operations at the mine, located in the Antofagasta region.

In a release on Wednesday (December 12), three unions operating at the mine announced that they had run out of patience with Codelco in regards to healthcare provided to workers, restructuring at the mine as it transitions to underground operations and the potential for job losses as a result.

In other base metals news

In other news, the northern Queensland city of Townsville is set to reap the benefits of a AU$300-million expansion to the Sun Metals zinc refinery there, creating 350 jobs during construction and 100 permanent positions when works are complete.

In more news from Australia, there was a flourish of pomp and circumstance in South Australia as GFG Alliance announced it planned to construct the largest steel plant in the western world in the small iron-focused city of Whyalla.

Mount Gibson Iron (ASX:MGX) released an update on its waterlogged Koolan Island project in Western Australia, announcing that the de-watering process for the mine was now 60-percent complete and on track for an early 2019 return to operations. The seaside (and undersea) mine has been sitting idle since 2014 when its seawall failed, flooding the main pit.

In North America, Canadian company EMX Royalty (TSXV:EMX) announced recently that it has entered into a strategic alliance with Australian BHP spin-off South32 (ASX:S32) that covers exploration for copper and other base metals in Arizona, New Mexico and Utah.

More news from the Democratic Republic of Congo’s (DRC) Gecamines, which this week announced it would be increasing its stake in its Boss Mining JV with ENRC Africa Holdings after a renegotiation of terms between the two companies. Boss Mining exported 17,000 tonnes of copper in H1 2018, and under the new terms will be 49-percent owned by Gecamines, up from 30 percent.

Meanwhile, BHP has had its plans to sell its smallest copper mine in Chile fall through after the buyer, private equity firm EMR Capital backed out. BHP had announced the plans to sell the mine in June, and the deal was expected to close during this quarter.

Finally, staying in South America, media outlets are reporting that Vale (NYSE:VALE) has purchased a technology firm with expertise in improving production of higher-grade iron ore, supposedly pointing to a potential move by the company to take full control of the Samarco JV, which it shares with BHP.

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