Copper News Round-Up 2015: Freeport-McMoRan to Cut Output, Copper Prices Up

Copper prices are still down nearly 20 percent from the start of the year, but the red metal has seen a tick upwards this week, with spot copper prices rising 0.5 percent, to $2.37 per pound.
Still, the pressure on copper prices this year has been tough for mining companies such as Freeport-McMoRan (NYSE:FCX), which announced plans to cut its copper and moly output due to low prices.
Here’s a look at recent copper news and at what’s been happening in the copper space lately.

Prices gain on positive economic data

Though the red metal was still feeling the pressure from a stronger US dollar on Wednesday, spot copper prices gained 2 cents on Thursday to finish at $2.37. The Wall Street Journal reported that the rise was driven by the release of US home sales data that surpassed economists forecasts, and by news of economic stimulus in China. According to the news outlet, the People’s Bank of China put $16.6 billion into financial institutions “to boost liquidity and encourage lending to small businesses and the agricultural sector.”
“Everyone is wondering whether there’s more easing to come out of China. The hopes of stimulus are supportive for copper,” Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago, told the Journal.
For his part, columnist Andy Home has argued that despite signs of a slowdown, China is still importing more copper than many might think. He said, “there’s no clear-cut evidence that the resilience of refined copper imports this year is directly being caused by shifts in product mix … Which suggests that Chinese demand for copper is not as bad as widely assumed.”

Freeport-McMoRan to cut copper output

Reacting to low commodities prices, Freeport-McMoRan, the world’s largest publicly traded copper company, announced in its third-quarter results that it will further cut its copper output for the year due to low prices. This month, the company initiated a plan to reduce operations at its Sierrita mine in Arizona to 50 percent — that should reduce output by 100 million pounds of copper and 10 million pounds of moly per year. The company added that it is “also evaluating the economics of a full shutdown.”
Freeport is not the first major mining company to cut copper production. Back in September, prices for the red metal rose when Glencore (LSE:GLEN) announced a new debt reduction plan that includes cutting approximately 400,000 tonnes of copper cathode out of the market.
Meanwhile, Teck Resources (TSX:TCK.B,NYSE:TCK) recently reported $2.2 billion in impairment charges for Q3. The bulk of that came from the company’s coal assets, but its copper operations also got a $0.3-billion write down.
That said, Freeport has stressed that it still plans to focus on copper. “We’re prepared to do whatever it takes — whatever it takes — to keep our operations generating positive cash flows to protect our liquidity and hold onto these assets for a better day,” Freeport President and CEO Richard Adkerson told Reuters.

Junior copper news

Cordoba Minerals (TSXV:CDB) will acquire the Alacran copper-gold project in Colombia through an option agreement with Sociedad Ordinaria de Minas Omni. The acquisition will allow Cordoba to consolidate the entire San Matias copper-gold district, where the company currently holds its San Matias project.
Cordoba will also enter a private placement for C$1.6 million with High Power Exploration to fund the option. High Power is indirectly controlled by mining entrepreneur Robert Friedland.
Also this week, NovaCopper (TSX:NCQ) reported high-grade drill results from summer exploration at its Arctic project in Alaska. Highlights include 22 meters of 3.86 percent copper, 0.86 g/t gold, 71 g/t silver, 1.15 percent lead and 5.36 percent zinc.
Furthermore, NovaCopper put out a release noting that the Alaskan government has authorized funding for the Alaska Industrial Development and Export Authority to begin an environmental impact statement for the Ambler access road project.
Finally, Kaizen Discovery (TSXV:KZD) intersected mineralization 40 kilometers along strike as a result of reconnaissance drilling at its Coppermine project in Nunavut. Those results have doubled the extent of known mineralization in the basin.
Highlights include one intercept of 29 meters grading 0.57 percent copper, including a 1-meter interval grading over 3.04 percent copper and another 6-meter interval grading 1.06 percent copper.

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