Base Metals Weekly Round-Up: Vale in the Firing Line

In base metals news, the Brazilian state prosecutor investigating last year’s Brumadinho tailings dam disaster is preparing to charge multiple executives and employees of Vale (NYSE:VALE), German inspection firm TÜV SÜD as well as the companies themselves.

The disaster last year claimed the lives of at least 259 people and saw communities ravaged by tailings waste unleashed from Dam 1 at the Córrego do Feijão iron ore mine in Minas Gerais.

“What we can take away from the investigations is there were several factors pointing to risk — the risk was not unknown,” said Andress de Oliviera Lanchotti in an interview with Reuters on Wednesday (January 8). Lanchotti is the coordinator for the task force of Minas Gerais state prosecutors investigating the disaster. Charges are expected to be made within days.

The disaster wreaked havoc on the company through 2019 as authorities closed company facilities and halted operations, with the fallout set to continue well into 2020.

Shares of Vale fell by 1.74 percent on the New York Stock Exchange on Thursday (January 9), with the company trading at US$12.99 at the end of the day.

Elsewhere in Latin America, Chile saw copper production slump at the Escondida mine in November, though analysts have downplayed the impact of the ongoing social unrest in the country.

Another major copper jurisdiction, the Democratic Republic of Congo, reported an increase in its copper output from January through to November of last year, saying there was an uptick of 16 percent to 1.308 million tonnes. At the same time, its cobalt production fell by 18 percent to 82,220 tonnes.

In Australia, Havilah Resources (ASX:HAV) reported this week that it has found rare earth elements at its flagship Kalkaroo copper project in South Australia.

In North America, Taseko Mines (TSX:TKO,NYSEAMERICAN:TGB,LSE:TKO) achieved 2019 operational guidance at its Gibraltar copper mine in British Columbia, with Taseko overall producing 129 million pounds of copper and 2.7 million pounds of molybdenum at Gibraltar for the year.

Finally, Excelsior Mining (TSX:MIN,OTCQB:EXMGF) released an update on operations at its Gunnison copper project in Arizona, reporting that it has achieved positive initial wellfield results as it transitions to being a copper production company.

On the London Metal Exchange, copper spent the week on the up, starting at US$6,097 a tonne on before rising to US$6,155 by Thursday.

Zinc enjoyed a similar narrative, going from US$2,333 a tonne at the start of the week to US$2,417 towards the end of it.

Nickel was also up, but not before dithering for the first half of the week around US$13,800 a tonne, then jumping between Wednesday and Thursday to US$14,120.

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