In this July base metals update, Charlotte and Scott talk about BHP Billiton, Lundin Mining and Nevsun Resources, as well as base metals prices.
Charlotte and Scott are back again to talk about what’s been going on with base metals, with BHP Billiton (ASX:BHP,LSE:BLT,NYSE:BBL) engaged in wage negotiations and Canadian miners in takeover talks.
Watch the interview above for a rundown on the top stories and a look at prices for the month, or scroll down to read the full transcript.
Charlotte: What’s some big news that’s been happening in base metals in July?
Scott: Well Charlotte, July has been a month for developing and ongoing stories all over the world for the base metals miners.
A big news story that’s happening right now is wage negotiations at BHP’s Escondida copper mine in Chile. It’s been in the news for the whole month so you’d have to have been living under a rock to miss it, but in the past few days it’s all come to a head.
BHP and its unionized workforce have been negotiating wages for weeks, with workers asking for a 5 percent pay rise and a bonus for each worker equal to 4 percent of profits, or up to $40,000, per worker. Now, BHP is unsurprisingly not willing to offer that, and unfortunately what it called its final offer has in the last few days been turned down. According to sources, the workers have overwhelmingly rejected the company’s offer of 27,000 per worker and a pay rise linked to inflation rates.
This is a story that’s happening right now, with workers currently voting on legal strike action.
Charlotte: What about in the rest of the world?
Scott: Another big story is the tango between Canadian miners Nevsun Resources (TSX:NSU) and Lundin Mining (TSX:LUN), with the latter following through on a hostile takeover bid for Nevsun for C$1.4 billion on July 26.
Astute observers don’t need to know much in the way of mathematics to know that that’s a hundred million dollars less than the original joint offer Lundin made back in May. Nevsun has asked shareholders to wait while the board decide what to do next, but the pressure is on.
Charlotte: What about prices for copper?
Scott: Well copper spent most July following trends in June, in that it kept on heading down, reaching as low as US$5,981 before a turnaround towards the end of the month. This could well be because of strike fears at Escondida – the red metal is now headed upwards and as of the 30th, was trading at US$6,180. Even with the bounce off the low, copper lost over 6 percent of its value over the month.
Charlotte: Have the other base metals been following copper’s lead this month as well?
Scott: Well zinc certainly did. It reached a low around the same time as copper, hitting US$2,526. On the 30th, it was trading at US$2589.5 – again, 11 percent below where it started for the month.
The same again for nickel, which enjoyed a rebound from a low but still lost over 6 percent of its value, trading at US$13,675 on the 30th.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.