Capricorn Copper Mine on Track to Start Production in November

The Australia-based mine is expected to produce 25,000 to 35,000 tonnes of copper concentrate a year, and is one of few projects to come online recently.


Australia’s Capricorn copper mine is on track to start production in November, private equity fund EMR Capital confirmed on Wednesday (November 1).

The operation, a joint venture between EMR and Lighthouse Minerals, is expected to produce 25,000 to 35,000 tonnes of copper concentrate a year.

“It is on track to start production in November which will be quite a milestone,” EMR Chief Executive Jason Chang told Reuters.

Lighthouse and EMR bought the mine in October 2015 from Aditya Birla, which placed the project on care and maintenance in 2013 due to falling copper prices. In April of this year, the Queensland government granted the project special status to assist with the permitting process.

“This is new investment in one of the world’s most valuable base metal areas, and clear evidence of the opportunities still to be had in the north-west,” Queensland State Development Minister Anthony Lynham said at the time.

A lack of investment and a decline in ore quality from major mines have fueled concerns about a possible copper supply shortfall. In fact, the Capricorn mine is estimated to be one of the few copper projects to come onstream in recent years.

But copper prices have been on the rebound, up more than 26 percent since January, which could encourage miners to restart operations or expand their exploration activities in the near future.

“We have seen a few projects being committed in this higher price environment, but we still envisage a period of deficit before these start to have an impact,” said Karen Norton, senior analyst at Thomson Reuters GFMS.

According to the International Copper Study Group, the copper market is expected to be in deficit in 2018 for the fourth year in a row.

Norton mentioned the startup of First Quantum Minerals’ (TSX:FM) Cobre Panama project as an example. She also expects sizeable expansions at existing operations to bring new supply into the market, with examples being Southern Copper’s (NYSE:SCCO) Toquepala mine and the planned restart of Glencore’s (LSE:GLEN) African operations.

On Thursday (November 2), LME copper closed down 0.1 percent at $6,922 per tonne.

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

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