Charlotte and Scott talk about what happened in June in the base metals space, from iron in Australia to Canadian copper miners in Africa and all the way down to a fall in prices.
In the June base metals update, Charlotte and Scott talk about what’s been happening in Australia in iron ore, and who Ivanhoe Mines (TSX:IVN) is in business with.
Also Scott talks about prices, and what direction base metals headed in the last month of Q2.
Watch the video above, or read the full transcript below.
Scott: The iron ore miners of the land down under have collectively announced they’ll be sinking almost US$6.5 billion into replacement mines in coming years.
First out of the starting block, Fortescue Metals (ASX:FMG) announced US$1.27 billion for its Eliwana project, BHP (ASX:BHP, LSE:BLT, NYSE:BBL) followed with news it would spend US$2.9 billion on its South Flank project and Rio Tinto (ASX:RIO. LSE:RIO, NYSE:RIO) said it would spend US$2.2 billion on its Koodaideri project. All three are located in the Pilbara of Western Australia, where an epic battle between rivals has been taking place.
As covered extensively by INN’s Australia reporter Olivia Da Silva, three major companies have been circling a fourth — Atlas Iron (ASX:AGO). The three, which include previously mentioned Fortescue, are eager to buy out the smaller miner seemingly for greater access to shipping berths at Port Hedland, where iron ore mined in the Pilbara is shipped from.
There’s plenty about this on our website, but as of early July its looking like Gina Rinehart’s Hancock Prospecting will go home with the prize that is Atlas Iron.
Charlotte: What about in other base metals, have there been any interesting developments in copper?
Scott: Well Ivanhoe Mines has a new largest shareholder, with the Chinese mega-conglomerate CITIC (HKEX:0267) buying a 19.9 percent stake in the Canadian company for C$723 million.
According to Ivanhoe, the proceeds will be going towards its three projects which include the Kamoa-Kakula copper project and the Kipushi zinc-copper project in the DRC.
While the news gave the Canadian miner a healthy boost at the time, Ivanhoe ended June 19 percent below its starting price of C$3.30 at C$2.67, possibly due to trade war jitters.
Charlotte: Speaking of prices, what have base metals been doing this month?
Scott: Well as noted by analysts everywhere, base metals were down in June.
Copper saw a 2.46 percent fall in value, while nickel was down 1.5 percent and zinc was hardest hit at 4.56 percent down. Zinc could have been worse though, as it fell as low as 6.3 percent below its starting price during the month.
Lead held steady over the month, while iron ore was also down with news that China’s appetite for the vital metal may be waning.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.