Copper Prices Boosted by China News

- November 26th, 2015

Copper prices dropped further this week as the US dollar stayed strong and concerns persisted over demand from China. However, the red metal gained back some ground on Thursday.

Copper prices have fallen sharply in the month of November, and threatened to break through the $2 level earlier this week.
However, the red metal found some support Thursday on news that the Chinese government is looking at stocking up on base metals. According to The Wall Street Journal, reports indicate that the government may start to stock up on nickel, zinc and aluminum. Chinese authorities may also intervene to combat what they see as excessive short selling of copper and other metals.
Spot copper prices were up 2.19 percent on Thursday, at $2.11 per pound. Meanwhile, LME copper prices were up 2.3 percent, to $4,656 per tonne, during morning European trading hours.

Copper news: Zambia won’t take over copper mines

Backtracking from an earlier statement that the Zambian government would take over struggling copper mines in the country, Zambia’s president has said that will not happen, Reuters said. The red metal makes up roughly 70 percent of Zambia’s export earnings, and poor copper prices have been weighing on the country’s economy. Back in October, a government official said that the country was expecting a 15-percent drop in copper production year-over-year.
Earlier in 2015, Zambia enacted a massive hike in royalties on open-pit mining operations, raising it from 6 percent to 20 percent. However, following the election of President Edgar Lungu, the government changed its decision and reinstated a lower rate.

Copper news: Rio Tinto CEO says copper to recover faster than other commodities

In an interview with Bloomberg, Jean-Sebastien Jacques, Rio Tinto’s (NYSE:RIO,ASX:RIO,LSE:RIO) CEO for copper and coal, stated that copper will stay under pressure for two to three more years, but that Rio still sees copper recovering faster than other commodities. “In the next two or three years we can see the light at the end of the tunnel as far as copper is concerned,” he said.

Junior company news

Copper Fox Metals (TSXV:CUU) released results of a preliminary economic assessment (PEA) for its Van Dyke in situ leach copper project in Arizona this week. The project will have a life-of-mine direct operating cost of $0.60 per pound of copper; at a copper price of $3 per pound, Van Dyke will have an after-tax internal rate of return of 27.9 percent with a 3.9-year payback period.
“We are pleased with the positive results of the PEA given the conservative approach used to design the project,” said Copper Fox President and CEO Elmer Stewart in Wednesday’s release. “The PEA has identified several aspects that, with positive results from additional testing and engineering, could extend the mine life and significantly increase project economics, indicating that Van Dyke could become a strong project in the mid-size copper development space.”
Also this week, NGEx Resources (TSX:NGQ) reported an updated resource estimate for its Filo del Sol silver-copper-gold deposit in Argentina. Highlights include a 42-percent increase in contained copper using a 0.3 percent copper equivalent cut-off grade. Overall, total inferred resources at the deposit sit at 381 million tonnes grading 0.39 percent copper, 0.33 g/t gold and 12 g/t silver.
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Copper Fox Metals is a client of the Investing News Network. This article is not paid-for content.

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