Table of Contents:
- Copper Price Update: Q1 2023 in Review
- Copper Price Update: Q2 2023 in Review
- Copper Price Update: Q3 2023 in Review
- 5 Major Copper Projects to Watch in 2023
- Top 5 Copper Stocks on the TSX
- Top 5 Junior Copper Stocks on the TSXV
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A Sneak Peek At What The Insiders Are Saying
 | "Copper cannot be substituted in (electric vehicles) or wind and solar energy, and its appeal to investors as a key green metal will support higher prices over the next few years"
— Ewa Manthey, ING
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 | “The mining industry needs to continue changing its image from an extractive-only industry to a value-creating industry. It is my belief that social license is one of the top challenges copper mining is facing, and will remain facing in the near future"
— Federico Gay, Refinitiv
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Copper Outlook 2023
Copper Price Update: Q1 2023 in Review
Copper prices have been performing well since the beginning of the year, trading above the U$8,500 per metric ton (MT) mark for most of the first quarter.
But this time last year, the red metal had rallied to an all-time high, surpassing the US$10,500 level. Could copper prices hit a record again in 2023?
With Q2 already in motion, the Investing News Network (INN) caught up with analysts, economists and experts alike to find out what’s ahead for copper supply, demand and prices. Here's what they had to say.
How did copper prices perform in Q1?
Copper prices kicked off the first quarter of the year trading above US$8,300, staying steady from where they ended 2022.
Copper's price performance in Q1.
Chart via the London Metal Exchange.
The red metal's highest point of the quarter came on January 23, when it was changing hands for U$9,356. Prices performed in a choppy fashion throughout Q1, but remained well above US$8,500. Copper touched its lowest point of the period on January 4, when it hit US$8,252.
Speaking with INN about major trends seen in the copper space in the first quarter, Karen Norton of Refinitiv said it was a period where slow supply growth met sluggish demand.
“This fit in with our earlier reading of how things would pan out in the early months of this year, with prices largely rangebound,” she said. “China’s demand recovery has been somewhat subdued to date.” China is the world's top consumer of copper.
All in all, prices ended the three month period up by more than US$600, increasing over 7 percent since the beginning of the year. Copper finished Q1 trading at US$8,993.
Copper supply and demand dynamics in 2023
Copper is widely used in building construction, electrical grids, electronic products, transportation equipment and home appliances. But demand for the red metal has been under pressure from macroeconomic factors, as well as developments in China.
Demand from the Asian country has been weaker than analysts had expected, while the global macroeconomic outlook also put the red metal under pressure during the first three months of the year. That said, the demand outlook for the rest of 2023 is somewhat optimistic.
Chinese state-backed research house Antaike is forecasting that demand for refined copper in China will grow 2.7 percent this year to reach 13.68 million MT. Meanwhile, CRU Group is expecting refined copper consumption in China to rise 2.8 percent to 13.98 million MT in 2023.
“We believe, for copper, China’s COVID policy change should prove supportive for demand in the medium to long run, although rising COVID infections could weigh on demand in the immediate term,” ING’s Ewa Manthey said in a note. “However, global macroeconomic headwinds are likely to persist in 2023 and the risk of global recession will remain a threat to the demand recovery in China, capping further gains.”
It's possible supply will fall short of current market expectations and give prices upwards momentum.
“We feel this is more likely than it overshooting to the upside of most forecasts, although we still feel that relatively unspectacular demand growth will limit upside potential,” Norton said. “First quarter numbers are only just starting to come in, but as these start to filter in, it does look as if our production growth forecast for this year will more likely need to be tempered rather than raised.”
In terms of copper projects to keep an eye out for, Norton said she continues to monitor with interest the progress of the Quebrada Blanca Phase 2 project in Chile, as well as Kisanfu in the Democratic Republic of Congo (DRC). The former in particular is expected to make a substantial contribution to supply growth this year.
Chile is the world’s largest copper producer, putting out 5.2 million MT of copper in 2022, while the DRC is in second place at 2.2 million MT.
“Also we are keeping an eye out for updates on the Udokan project in Russia as news is quite sketchy,” Norton said. “Beyond that, we also track progress closely on the further expansion of the already sizable Kamoa-Kakula mine in the DRC and Oyu Tolgoi in Mongolia.”
What's ahead for the copper market in 2023?
For copper-focused investors, there are few catalysts that could impact the sector as the year continues to unfold.
Merger and acquisition activity in the copper space picked up pace in the past quarter, with all eyes on Glencore’s (LSE:GLEN,OTC Pink:GLCNF) bid for Canada's Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK). The move shows the appetite for copper resources as supply tightness looms.
“While it would have a longer-term influence, increasing M&A activity remains interesting, raising the possibility that projects that may appear to have stalled will gather fresh momentum and progress sooner,” Norton said.
Another catalyst to watch for, according to the expert, is the possible diversification of other industrial sectors into the mining space as they seek to secure the materials they need for the energy transition.
For example, electric vehicles use about four times more copper than internal combustion engine cars, as per the International Copper Study Group. Copper is used in batteries, windings and the copper rotors used in electric motors, as well as wiring, busbars and charging infrastructure.
“Copper cannot be substituted in (electric vehicles) or wind and solar energy, and its appeal to investors as a key green metal will support higher prices over the next few years,” ING's Manthey said.
Looking at the short term, key factors to watch include the speed of China’s recovery, possible sanctions on Russian copper and labor unrest at mines in Chile and Peru, FocusEconomics analysts said.
“Prices are seen losing ground in the coming quarters, dented by the global economic slowdown,” they explained.
Panelists polled by the firm see copper averaging US$8,575 in Q4 2023 and US$8,444 in Q4 2024.
For Norton, prices may well remain around that level in the second quarter.
“Perhaps with more of an upwards bias if China’s demand numbers start to look better on a year-on-year comparison, even if that comparison is with a COVID-affected period,” she added.
For its part, ING expects prices to continue to recover from the second quarter onwards on the back of improving reopening sentiment and tight inventories, with prices hovering around US$9,100 in the fourth quarter.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Additional information on Copper stock investing — FREE
Copper Price Update: Q2 2023 in Review
Copper prices have been performing with volatility since the start of the year.
Staying above the US$8,000 per metric ton (MT) mark for most of the first half of 2023, the red metal reached its year-to-date high of US$9,356 on January 23. But copper has been unable to maintain that level, falling back almost to where it started the year.
With the second half of 2023 already in motion, the Investing News Network (INN) caught up with analysts, economists and experts alike to find out what’s ahead for copper supply, demand and prices. Here's what they had to say.
How did copper prices perform in Q2?
Copper prices kicked off the second quarter of the year trading at US$8,917, but soon began to fall.
Copper's price performance in Q2 2023.
Chart via the London Metal Exchange.
The highest point of the quarter came on April 13, when copper was changing hands for U$9,058.50. Since then, prices have been unable to go back to the US$9,000 level, plummeting all the way down to US$7,901.50 — the lowest point of the quarter.
Speaking with INN about copper’s performance in the second quarter, Federico Gay, senior analyst at Refinitiv and LSEG, said the initial impulse the Chinese economy had during the first quarter started to show weakening signals.
“(The) copper price, as a barometer for global markets, usually increases during economic expansion times and decreases with lower industrial activity,” he said. “After the zero-COVID policies finished in China, optimism reigned, but the Chinese Purchasing Managers Index contracted in April … while in other parts of the world inflation proved to be a bigger challenge than originally imagined, and a general stagnation of the economy was becoming clearer.”
All in all, copper prices ended the three month period at US$8,315.50, down by more than US$600. That left the red metal almost flat since the start of the year.
Copper supply and demand dynamics in 2023
Copper is widely used in building construction, electrical grids, electronic products, transportation equipment and home appliances. But demand from top consumer China has been weaker than expected, and the global macroeconomic outlook has also put the red metal under pressure.
“While China macro has been weak, actual copper demand has held up relatively well, helped by green energy applications, such as electric vehicles (EVs) and renewables, especially solar, domestically — and in the case of EVs, in export markets as well,” Robert Edwards of CRU Group told INN.
EVs use about four times more copper than internal combustion engine cars, according to the International Copper Study Group. Copper is needed for the batteries, windings and rotors used in electric motors, wiring, busbars and charging infrastructure.
Additionally, air conditioner production, which accounts for about 10 percent of Chinese copper demand, is up 10 percent year-on-year. Domestic sales have been very strong even with the apparent weakness in the property sector, according to CRU data.
“Regarding China, there’s a growing voice of a broader stimulus package, which is expected to support currently troubled sectors, such as real estate and small- to medium-scale industries, that might help boost domestic demand,” Refinitiv’s Gay said.
In the rest of the world demand is slowing as expected.
“Especially in Europe — I would say there’s limited recovery expected for the second half, if at all,” Edwards said. “There are some pockets of demand strength, such as India, but it is still a small market.”
For Gay, the US and the Eurozone’s ongoing battles against inflation are weighing on demand.
“Although some promising results are starting to be seen in some countries, it seems unlikely that industrial activity will pick up shortly,” he said. “The war in Ukraine is also factoring down, as it brings a certain uncertainty level to the market.”
Supply on the other hand was hit during the first few months of the year.
“The first two months of the year, production was quite heavily disrupted, especially with protests at mines in Peru, but subsequently many of the issues have been resolved and mine side is performing reasonably well in aggregate,” Edwards said.
Chile is the world’s largest copper producer, putting out 5.2 million MT of copper in 2022, while Peru comes in second at 2.2 million MT, together with the Democratic Republic of Congo. “We were looking at a deficit (for 2023), but the market is probably now much closer to balanced, if not edging into surplus,” Edwards said.
Refinitiv data shows that during the first months of the year the refined copper balance was at a deficit of around 77,000 MT. “Considering current variables and an improving economic sentiment for the second half of the year, we estimate a surplus circa 80,000 tonnes at the end of 2023,” Gay said.
Looking at the long term, copper is facing a potential supply shortage before the end of the decade, with juniors and producers facing hurdles to bring new supply online.
For Edwards, some of the challenges for miners today include shareholder willingness to support the approval of major capital expenditures. “(There’s also) rising capital costs with increased uncertainty, and (there are) still challenging operating conditions in some countries,” he added.
Gay agreed, saying the most complex factor for the mining industry at the moment is the high level of uncertainty and lack of long-term policies regarding the mining industry in top-producing countries, mainly Chile and Peru.
“This has eroded the investor’s trust and possibly slowed down some necessary investments in the region,” he said. “Aging mines and depleting resources might act as a ticking bomb that will be harder to disarm as time passes by.”
The analyst also pointed to the need for miners to do extra work on engagement with communities to secure long-term relationships and minimize disruption risks.
“The mining industry needs to continue changing its image from an extractive-only industry to a value-creating industry,” he said. “It is my belief that social license is one of the top challenges copper mining is facing, and will remain facing in the near future.”
What's ahead for the copper market in 2023?
For copper-focused investors, there are few catalysts that could impact the sector as the year continues to unfold.
In the short term, Edwards said there are still potential headwinds from macroeconomic factors, such as China’s recovery and the US’ inflation narrative. Another important factor to consider is low London Metal Exchange copper stocks, which as of July 4 stood at 67,200 MT.
“Most of it (is) unwarranted, meaning that companies can retrieve them at any time,” Gay said. “Low stocks are usually, but not always, a bullish sign for copper prices, although several other factors weigh in.”
In terms of prices, CRU sees levels relatively rangebound in Q3, averaging around US$8,500.
July is set to be a month with key catalysts in the US, where the Federal Reserve will meet to discuss its interest rate policy, and in China, where the decision-making body Politburo is expected to make stimulus announcements.
“Depending on the results and scope of these meetings, the copper price might experience a boost and could breach US$9,000, although the current state of the market seems to lack impulse to contain these psychological barriers for a long time,” Gay said.
For FocusEconomics analysts, prices are seen remaining close to current levels in the coming quarters.
“The health of the Chinese industrial sector and prospective stimulus policies in the country are the main factors to monitor on the demand side,” they said in their latest report. “Supply-wise, adverse weather conditions and labor unrest at mines in Chile and Peru, as well as possible sanctions against Russian copper, pose upside risks.”
Panelists polled by the firm see copper averaging US$8,341 in Q4 2023 and US$8,426 in Q4 2024.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Additional information on Copper stock investing — FREE
Copper Price Update: Q3 2023 in Review
Copper prices have experienced volatility in 2023, but the overall trend has been down.
The metal hit its highest point of the year on January 23, reaching US$9,438.65 per metric ton (MT). During Q3, prices reached a quarterly high of US$8,850 on July 31 before retreating and closing out September at US$8,225.01.
Copper's price performance in Q3 2023.
Chart via the London Metal Exchange.
Various factors have contributed to copper's fall over the course of the year, including the easing of the supply chain issues that caused prices to spike from the end 2022 into the start of 2023.
What are the factors that affected prices during the third quarter? Read on to find out.
Chinese copper demand takes a hit
The worsening crisis in China's real estate has been a key contributor to copper's price decline. Country Garden (OTC Pink:CTRYF,HKEX:2007), the country’s largest real estate company, warned in August that it was nearing default on its debt, while Evergrande’s (OTC:EVGPF,HKEX:3333) American arm filed for Chapter 15 bankruptcy protection in August.
The real estate sector represents 30 percent of China’s GDP and is a primary consumer of the red metal. While the government has tried to stimulate home buying in the country, its efforts haven’t achieved positive results. The precarious state of the industry in China has heavily impacted the outlook for copper demand.
Copper surplus expected in 2024
This sinking demand has been happening alongside global copper production increases, which the International Copper Study Group believes will shift a 27,000 MT deficit for 2023 to a surplus of 467,000 MT in 2024.
Higher output of the red metal is being driven by new mines starting production in the Democratic Republic of Congo (DRC), Peru and Chile. These new operations include the Phase 3 expansion of Ivanhoe Mines' (TSX:IVN,OTCQX:IVPAF) Kamoa-Kakula mine in the DRC, which is on track to deliver 390,000 to 430,000 MT of copper in 2023.
Anglo American (LSE:AAL,OTCQX:AAUKF) is also set to make significant copper production contributions this year. The company's Peru-based Quellaveco mine, which came online in 2022, is expected to reach its target of 310,000 to 350,000 MT of copper in 2023. Meanwhile, in Chile, Phase 2 of Teck Resources' (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) Quebrada Blanca project delivered its first bulk copper concentrate in March. It is expected to put out 100,000 MT of the red metal in 2023 before ramping up to 285,000 to 315,000 MT per year between 2024 and 2026.
Additionally, in September, Udokan Copper began production at Udokan, which has been referred to as Russia’s largest untapped copper deposit. It is part of the Trans-Baikal region and is home to several other mining deposits. The mine has an estimated yearly production of 150,000 MT of copper cathode and concentrate, with 26.7 million MT of copper resources. However, with US sanctions in place, the company's ability to reach the global market is limited.
Protests in Peru disrupt copper supply
The year started with a series of deadly mining protests in Peru — they began in late 2022 and continued through March, leading to a 25 percent year-on-year drop in mining exports from the country in January.
While the protests slowed in the second quarter, they once again flared up in mid-July and into August, this time coordinated by mining workers and unions who demanded the resignation of President Dina Boluarte. However, the latest round of protests were largely confined to the nation’s capital of Lima, limiting their effects on the mining sector.
After months of unrest, Peruvian Prime Minister Alberto Otarola pledged at the end of September to crack down on the chaos and instability. Industry insiders have noted that the country remains weak in its effectiveness in curbing the protests, and there is uncertainty around government stability as well as industry regulations and red tape.
Despite these issues, copper production in Peru increased by around 19 percent during the first three quarters of the year compared to the same period in 2022. In an email to the Investing News Network, Federico Gay, senior mining analyst at Refinitiv, noted that these production increases were largely due to new mining operations coming online or reaching capacity in Peru in 2023, including Anglo American’s Quellaveco.
This increased production will help Peru retain its position as a top copper producer for the time being. “We estimate Peru will remain the second largest producer for the next couple of years,” Gay explained, “but the DRC, currently the third largest producer, is threatening to take Peru’s place in the future.”
Major miners make copper M&A moves
Mining industry mergers and acquisitions have been running hot in 2023, but what does that mean for copper specifically? There were several agreements made during the third quarter.
Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) announced on August 1 that it has agreed to purchase Pan American Silver’s (TSX:PAAS,NYSE:PAAS) 57.74 percent operating stake in Agua de la Falda, and will enter into a joint exploration venture with the state-owned Corporacion Nacional del Cobre de Chile (Coldelco), the world's largest copper producer. Along with the partnership, Rio Tinto will acquire 100 percent of the nearby Meridian property exploration concessions.
The company notes that Agua de la Falda was previously explored for precious metals, but there has been little exploration for copper, which will become the primary focus of the project.
On August 28, Rio Tinto also completed a transaction with First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) to develop Rio Tinto’s La Granja project, which it acquired from the government of Peru in 2006. The site has a measured mineral resource of 130 million MT at 0.85 percent copper and an inferred resource of 4.19 billion MT at 0.5 percent copper.
Glencore (LSE:GLEN,OTC Pink:GLCNF) announced on July 31 it had reached an agreement to acquire Pan American’s stake in the Minera Agua Rica Alumbrera (MARA) project. The acquisition will make Glencore the sole owner of the project in Northwestern Argentina. Glencore says MARA has proven and probable mineral reserves of 5.4 million MT of copper and 7.4 million ounces of gold, and will produce more than 200,000 MT of copper annually.
On July 13, Lundin Mining (TSX:LUN,OTC Pink:LUNMF) closed its acquisition of a 51 percent interest in SCM Minera Lumina Copper Chile. The acquisition will give Lundin access to the Caserones copper-molybdenum mine in Chile. Caserones produced 69,704 MT of copper and 2,393 MT of molybdenum in the first half of 2023, and contains proven and probable reserves of 2.55 million MT of copper and 76,000 MT of molybdenum.
What's ahead for the copper market in 2023?
While protests in Peru may have cooled, the political situation remains delicate in South America as countries throughout the region shift from right to left-leaning policies. “The consensus seems to be lacking consistency regarding foreign policies and investment protection,” Gay noted. This could mean further future instability for supply.
Looking further into the future, with more countries enacting policies for the green energy transition, demand for copper is expected to soar over the next decade. In fact, it has already been labeled a critical mineral by the US Department of Energy for its use in electric motors and renewable power generation.
Additional demand is likely to come from the real estate market as countries work to solve the global housing crisis. The market is already the largest consumer of copper, and pressure is mounting to build more affordable homes, as it’s predicted that 1.6 billion people could be impacted by the crisis by 2025. The World Economic Forum estimates 3 billion people will need access to affordable housing by 2030, requiring the construction of 96,000 homes per day.
Adding to the supply and demand problem is a lack of new mines being built. “The main problem is that the industry is not communicating the urgency to bring new mines online,” Gay said.
The new copper mine starts and expansions beginning operation in 2023 and 2024 are the last planned for the foreseeable future, and new mines can take decades to complete. This might be good news for those chasing the price of copper, but it’s likely to have a domino effect on other industries that rely on the red metal.
“We are reaching a point of no return for developing the long list of mining projects needed for the energy transition plans,” Gay said. “But it is my opinion that regulations are not expected to ease in the near future.”
Gay suggested that prices for copper are set to remain stable for the next few quarters, hovering around $8,500 through the end of 2023, before rebounding slightly to around $8,800 in 2024.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Additional information on Copper stock investing — FREE
5 Major Copper Projects to Watch in 2023
Macroeconomic factors paired with weaker-than-expected demand impacted the copper market in 2022 — a year in which the red metal experienced high volatility.
How supply and demand dynamics play out this year is yet to be determined, but in the long term more copper will be needed to meet increasing demand for the green energy transition.
Which major copper projects should investors watch in 2023?
According to the International Copper Study Group, copper mine production is expected to increase by 3 percent in 2023, down from the group’s 5 percent growth projection this past October. According to the organization, this decrease is due to "operational and geotechnical issues, equipment failure, adverse weather, landslides, revised company guidance in a few countries and community actions in Peru."
Even with this list of mitigating factors, world copper production is still expected to be positive thanks to additional output coming from new mines and expansions and ramp ups at existing mines. These are mostly expected in the Democratic Republic of Congo (DRC), Peru and Chile.
“In addition, output in a number of countries will recover due to the fact that production at the beginning of 2022 remained restricted as a result of COVID-19 related problems,” the group explains in a report.
Chile is the world’s largest copper producer, putting out 5.2 million metric tons (MT) of copper in 2022, while Peru and the DRC came in at a joint second place at 2.2 million MT each.
Commenting on which projects she'll be watching in 2023, Karen Norton of Refinitiv said Quebrada Blanca Phase II in Chile and the Kisanfu project in the DRC are two of the assets she is keeping an eye out for.
Read on for a look at those assets, as well as three other copper operations that experts think investors should keep an eye out for in 2023. Projects are listed in alphabetical order.
1. Kamoa-Kakula
Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) — in a joint venture with Zijin Mining Group (OTC Pink:ZIJMF,HKEX:2899), Crystal River Global and the government of the DRC — operates the Kamoa-Kakula copper project in the African country. Phase 1 of the project is able to produce 200,000 MT of copper every year, and a Phase 2 concentrator was commissioned months ahead of schedule in April 2022.
After reaching total copper production of 333,500 MT in 2022, achieving the upper end of its guidance, this year production is expected to reach between 390,000 and 430,000 MT of copper in concentrate.
According to a prefeasibility study for its upcoming Phase 3 and Phase 4 expansions, the company anticipates an average annual production of 654,000 MT of contained copper in concentrate from 2025 to 2029.
Ivanhoe has signed offtake agreements for copper concentrate from the project with CITIC Metal and Gold Mountains International, a subsidiary of Zijin Mining, for 50 percent each of the copper products from Kamoa-Kakula’s Phase 1 production.
2. KFM
KFM, previously named Kisanfu, is located about 33 kilometers from Tenke Fungurume, one of the largest copper-cobalt mines in the DRC. In 2020, the project was bought by CMOC (OTC Pink:CMCLF,HKEX:3993) from US-based Freeport-McMoRan (NYSE:FCX) for US$550 million.
The company is expecting to start production at the project by the end of the second quarter of 2023. Once full production is achieved, the asset is expected to produce an average of 90,000 MT of copper metal and 30,000 MT of cobalt metal per year.
During the first quarter of 2023, KFM achieved output of 4,375 MT of copper and 102 MT of cobalt.
3. Quebrada Blanca Phase 2
With an initial mine life of 28 years, Teck Resources’ (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) Quebrada Blanca Phase 2 project in Northern Chile produced its first bulk copper concentrate in late March. The Vancouver-based company is expecting to advance commissioning and ramp up to full production through 2023.
Teck has invested more than US$5 billion in the project, which is forecast to produce around 285,000 to 315,000 MT of copper per year between 2024 and 2026. When full production is achieved, Quebrada Blanca Phase 2's output is expected to double Teck’s copper production on a consolidated basis.
The TSX-listed company has hiked the costs for the project once again, saying its capital cost guidance could increase to US$8 billion to $8.2 billion.
4. Oyu Tolgoi
Known as one of the largest copper and gold deposits in the world, Oyu Tolgoi is located in the South Gobi region of the Mongolia and is operated by Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO). Rio Tinto owns a 66 percent stake in the asset, and the government of Mongolia owns the remaining interest.
The first ore from Oyu Tolgoi was mined at the open pit in April 2012, but over 80 percent of the mine’s total value lies deep underground, where production began in March 2023. Rio Tinto expects Oyu Tolgoi to be the fourth largest copper mine in the world once the underground mine is fully operational. At peak production, the asset is forecast to produce 500,000 MT of copper per year.
5. Udokan
With more than 26 million MT of mineral resources, the Udokan copper project is both Russia’s largest and one of the world’s biggest undeveloped copper deposits. The first stage of the project’s plant will deliver up to 135,000 MT of copper per year, with processing capacity set at 15 million MT.
Established in 2008 to develop its namesake deposit, Udokan Copper is part of the diversified Russian holding company USM, founded by billionaire Alisher Usmanov. The businessman was sanctioned in March 2022 following Russia’s invasion in Ukraine.
This is an updated version of an article first published by the Investing News Network in 2023.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Additional information on Copper stock investing — FREE
Top 5 Copper Stocks on the TSX in 2023
Low supply and high demand saw copper open the year at US$9,450.11 per metric ton (MT) on January 25. Supply issues in particular supported prices, including in Peru, where protests continued on from 2022.
As the year wore on, a supply deficit turned into a surplus as the copper market felt the decline of the Chinese real estate industry, with two of the country's biggest companies faltering. However, copper shortfalls are expected to become the norm in the coming years as demand from the energy transition increases, mine development slows and older mines continue to decline — good news for mining and exploration companies focused on the red metal.
What about 2023? Copper had retreated to US$8,099 by October 30, but some companies focused on the metal have performed well. Read on to learn which have been doing the best and why.
Company Profile
Year-to-date gain: 50.82 percent; market cap: C$243.78 million; current share price: C$0.46
Northern Dynasty Minerals is an exploration and development company focused on the Pebble project, a copper-molybdenum-gold-silver project located 200 miles southwest of Anchorage in the Bristol Bay region of Alaska.
Northern Dynasty describes the site as “one of the greatest stores of mineral wealth ever discovered.” The project has measured and indicated resources of 6.5 billion MT of copper and inferred resources of 4.5 billion MT. For gold, it contains 53.82 million measured and indicated ounces and 28.1 million inferred ounces, and silver resources for the site stand at 249.3 million ounces measured and indicated with 121.7 million ounces inferred. Lastly, Pebble holds molybdenum resources of 1.26 million MT in the measured and indicated category with an additional 821,000 MT inferred.
The project stalled in 2020 during the permitting phase following a US Environmental Protection Agency veto that suggested the proposed mine would damage the Bristol Bay watershed. Shares of the company surged following Northern Dynasty's July 26 announcement that the State of Alaska has appealed to the Supreme Court of the US to reverse the veto.
The case has yet to make its way before the court, and Northern Dynasty reported on September 27 that the federal government has asked for an extension until November to file its brief with the court. The court is expected to make a decision to hear the case by the end of the year.
Company Profile
Year-to-date gain: 48 percent; market cap: C$60.9 million; current share price: C$0.37
Sierra Metals is a mining company focused on the production of copper, as well as additional base and precious metals as by-products. Its primary operations are the Bolivar copper mine in Mexico and the Yauricocha polymetallic mine in Peru. It also owns the Cusi silver mine in Mexico, but as of September 20 the mine was on maintenance and the company had entered into discussions for its sale as it transitions into a primary copper producer.
Sierra’s gains early in the year represented a stabilization for the company following a two year period that saw its share price decline nearly 90 percent. The company’s production fell near the end of 2022 following the deaths of three workers at its underground Yauricocha mine and a subsequent 20 day closure. The mine was further impacted by protests that affected output across Peru. Following the shutdown of Yaurichocha and losses it was incurring at its Bolivar and Cusi mines, Sierra announced in October 2022 that it would undergo a strategic review process.
This marked the second strategic review by the company following one initiated at the end of 2021; the result was that the company decided to move away from silver and focus on its base metals business. Soon after the second strategic review was announced, Compañia Minera Kolpa, controlled by Alberto Arias, Arias Capital Resources’ (ARC) founder and Sierra’s former board chair, sent a letter of intent for a merger with Sierra. Sierra decided to continue to pursue its restructuring.
2023 saw the company improve its financial position as it began to divest its operations away from silver and focus on copper. Sierra achieved year-on-year gains in both the second and third quarters.
Despite improved production during those periods, investor interest has remained flat, and ARC, Sierra's largest shareholder, announced on May 1 its intention to replace the board's leadership. On June 12, ahead of the company’s annual general meeting, ARC released a dissident proxy circular encouraging investors to vote for the ARC selections. Sierra, through proxy advisor Glass Lewis, countered with its own press release on June 14 encouraging investors to maintain the current board. Shareholders ultimately voted in favor of keeping the existing board as reported on June 28.
Company Profile
Year-to-date gain: 37.46 percent; market cap: C$1.16 billion; current share price: C$4.11
Foran Mining is an exploration and development company focused on copper, zinc, silver and gold. It has eight properties across 140,000 hectares in the Hanson Lake district, which is located west of Creighton, Saskatchewan. Its primary project, McIlvenna Bay, is a mineral-rich deposit and part of the Flin Flon Greenstone Belt.
Initial drill results announced on February 16 from the Tesla target at McIlvenna Bay were positive, with a highlight interval of 10.1 meters grading 3.1 percent copper, 3 percent zinc, 32 grams per metric ton silver and 0.25 grams per metric ton gold, respectively. The winter 2022 program tested six holes over a 300 meter by 300 meter zone.
Foran has continued drilling at its Tesla target throughout the year. As of its most recent results on October 5, the target zone has been expanded to 750 meters and assays have indicated substantial zinc, copper and precious metals mineralization. Foran has also identified a mineralized zone, dubbed the Bridge zone, that connects the main McIlvenna Bay deposit with Tesla; according to the company, the new zone represents a significant area for growth. Moving forward, Foran will continue drilling into the winter with a goal of identifying high-grade deposits.
In addition to exploration at the McIlvenna Bay project, the company has secured significant financing in 2023, with a C$100 million private placement closing on March 27; Foran also secured a C$67 million equipment financing deal on September 7. Both will be used to develop Foran’s projects in Saskatchewan.
Company Profile
Year-to-date gain: 33.33 percent; market cap: C$80.91 million; current share price: C$0.08
St. Augustine Gold and Copper is a mining development company focused on its King-king project in the Mindanao province of the Philippines. Its annual production target for the site is 62,595 MT of copper, 236,169 ounces of gold and 506,504 ounces of silver.
Shares of St. Augustine rose sharply in June when the company secured funding through a private placement with Queensberry Mining and Development. Queensberry will receive 91,778,683 common shares for C$3,785,741.63 and will increase its ownership of St. Augustine to 49.48 percent. St. Augustine reached its year-to-date high on August 2, closing at C$1.
The most recent news from St. Augustine came on August 14, when it filed its interim financial statements on SEDAR+ for the three and six months ended on June 30. The report shows significant growth in cash on hand, which grew from US$150,000 to US$998,090 between December 31, 2022, and June 30, 2023.
Company Profile
Year-to-date gain: 14.36 percent; market cap: C$326.78 million; current share price: C$2.07
Imperial Metals is a mine development and operations company with projects in BC. Its operations include a 30 percent interest in the Red Chris mine in BC’s Golden Triangle, with the remainder being owned by Newmont (TSX:NGT,NYSE:NEM). Imperial also has 100 percent ownership of the Mount Polley mine, which reopened in June 2022, and the Huckleberry mine, which has been on care and maintenance since 2016.
Shares of the company have seen substantial gains twice this year. The first big increase came in January following the release of Imperial's 2022 production report; it showed that Imperial's portion of production at Red Chris saw year-on-year increases of 3.3 percent for copper and 5.8 percent for gold, bringing the company's share of ouptut for the year to 296.4 MT of copper and 1,049.4 ounces of gold. Imperial notes in the report that Mount Polley's restart brought in 2,815 MT copper and 12,078 ounces of gold in 2022.
The company's second large gain for the year came in July after it released an exploration report for Mount Polley on July 18; it was followed by a production report on July 24. Results from drilling in an underexplored region of Mount Polley were positive; they indicate good copper mineralization and reveal several targets for additional drilling. The company believes the mineralization in this area could be upgraded to reserves, which would ultimately help extend the mine's life.
Operations for the second quarter saw the company produce 3,203 MT of copper and 10,185 ounces of gold from Mount Polley; meanwhile, Imperial reported production of 1,868 MT of copper from its share of the Red Chris mine and 4,104 ounces of gold. Additionally, the company notes in its Q3 release that exploration is underway at Red Chris with a feasibility study in progress; it is expected to be completed by the end of 2023.
FAQs for investing in copper
Is copper a good investment in 2023?
As of midway through 2023, copper's price was up slightly from the end of 2022. Although many experts have a positive long-term outlook for the red metal based on supply concerns and its growing role in the energy transition, recession worries in countries across the globe are creating short-term headwinds for copper, which is heavily used in industry.
Investors who are interested in copper should make sure to perform their due diligence, as the volatility and unpredictability of markets and economies at the moment means that nothing is guaranteed.
What is copper used for?
Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.
Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.
How to invest in copper?
Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.
For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange
How to invest in a copper ETF?
Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.
In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.
There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).
How much is copper worth?
The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.
Copper saw historically high prices in the first half of 2022, and although it fell in the second half, 2023 has seen them move back up. In Q1 and into Q2, copper prices on the COMEX ranged between US$3.74 and US$4.27 and for the same time period on the LME, copper moved between US$8,200 and US$9,436.
Where is copper mined and how is it processed?
Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2022, putting out 5.2 million MT of the metal. Rounding out the top five are Peru and the Democratic Republic of Congo with 2.2 million MT each, China with 1.9 million MT and the US with 1.3 million MT.
Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.
The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.
Lastly, the copper is refined at a refining plant or smelter using one of two methods, pyrometallurgy and hydrometallurgy. Pyrometallurgy is employed for copper ore that is sulfide rich, while hydrometallurgy is used when the ore is oxide rich. The Investing News Network's guide on copper refining goes into further detail about how those processes work. Once these processes are complete, the copper is concentrated to up to 99.99 percent purity.
Article by Charlotte McLeod; FAQs by Lauren Kelly.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Additional information on Copper stock investing — FREE
Top 5 Junior Copper Stocks on the TSXV in 2023
Copper prices have been on a downtrend for much of 2023. The red metal hit a year-to-date high of US$9,450.11 per metric ton on January 25, but has since retreated, coming in at US$8,051.50 as of October 25.
Supply chain issues helped elevate copper at the beginning of the year when demand was soaring. For example, protests made it difficult for top copper-producing country Peru to get the commmodity to market.
However, the third quarter brought challenges in the other direction, with demand falling as China's real estate sector was at near collapse. China is the largest consumer of copper, and two of the largest real estate companies, China Evergrande Group (HKEX:3333) and Country Garden (OTC Pink:CTRYF,HKEX:2007), were close to defaulting.
Copper looks set to be stable through the end of the year and into 2024. While real estate may be struggling, copper is also essential for the energy transition, meaning prices are likely to go up as demand starts to outpace supply in the next 10 years — a trend exploration and mining companies that can identify and mine new deposits could benefit from.
The top junior copper stocks list below was generated on October 20, 2023, using TradingView’s stock screener, and it shows the TSXV-listed copper companies with the biggest share price gains year-to-date. Only companies with market capitalizations greater than C$10 million at the time data was gathered are included. Read on to find what's been driving these stocks.
Company Profile
Year-to-date gain: 284.62 percent; market cap: C$163.89 million; current share price: C$1.00
Minsud Resources is an exploration company focused on operations in Argentina. Its primary project, Chita Valley, is located in San Juan and covers 19,883 hectares. It hosts widespread porphyry copper-molybdenum-silver-gold mineralization and includes three core properties: Chita Valley, Brechas Vacas and the Minas de Pinto mineral concessions.
Shares of Minsud saw small gains through the first quarter of the year after the company announced that South32 (ASX:S32,OTC Pink:SOUHY) had given notice, as part of a 2019 earn-in agreement, of its intent to spend C$9.1 million on a fourth year of exploration to advance the Chita Valley project.
On March 21, Minsud announced that assay results from Phase 4 drilling at Chita Valley's Chinchillones target had revealed greater mineralization at the site than previously anticipated. They confirmed the presence of a second tonalitic porphyry, with a highlight assay of 0.94 percent copper, 0.38 grams per metric ton (g/t) gold and 5.56 g/t silver over 86 meters.
The company saw further gains through the second and third quarters as it announced similar positive results from its drilling program at Chita Valley. On May 8, Minsud reported high-grade yields, including the best drill hole intercept to date, which included an interval of 1.35 percent copper over 166.3 meters. The Phase 4 drilling revealed more extensive mineralization, allowing Minsud to expand its target zone to 2 kilometers by 2 kilometers.
The most recent drilling at Chita Valley as reported on August 1 further supports the extension of the Chinchillones target zone identified on May 8, and according to the company represents significant discovery. Minsud notes in the report, “The results of this drill hole are very significant, having intersected a continuous 670-metre interval of dacites and high-grade polymetallic (Cu-Ag-Au-Pb-Mo) hydrothermal breccia bodies.” At the time of release, Minsud had completed 40 drill holes over 28,674 meters as part of Phase 4 of the drilling program at Chita Valley.
Company Profile
Year-to-date gain: 98.06 percent; market cap: C$1.12 billion; current share price: C$6.12
NGEx Minerals, which is part of the Lundin Group, is a copper and gold exploration company focused on developing its projects in Argentina and Chile. NGEx’s primary focuses are the Los Helados and Lunahuasi (formerly Potro Cliffs) projects, both located within the Vicuña copper-gold district on the border of Argentina and Chile. The district is controlled by companies within the Lundin Group.
Strong assay results in April from within the Vicuña district were highlights of the first half of the year for NGEx, causing the company's share price to surge from C$4.40 to C$6.83 that month.
The first of these results came on April 4, when NGEx reported the discovery of a new zone of high-grade copper, gold and silver mineralization at what was then called Potro Cliffs. Drilling at the zone yielded intersects that were the highest yet at the site: 7.52 percent copper equivalent over 60 meters, including 18 percent over 10 meters. The zone marks the fourth major deposit in Lundin’s Vicuña district.
NGEx followed with results on April 13 from drilling at the Fenix and Alicanto zones at Los Helados; one hole from Fenix had an interval of 343.8 meters grading 0.9 percent copper equivalent, including 63 meters grading 1.25 percent. The quality of the results has helped to expand the size of the Fenix zone and shows that both zones have opportunities for future expansion.
NGEx continued to drill into July, and announced on July 4 that high-grade results had confirmed the newly discovered zone announced on April 4, which it named Lunahuasi. The company believes the samples indicate that the outer halo of a core deposit that has yet to be discovered. In addition to the high-grade copper, the drilling revealed bonanza-grade gold and silver values as high as 43.9 g/t gold and 1,165 g/t silver.
NGEx reported on August 11 it had closed a non-brokered private placement of C$85.7 million; the company plans to use the money to further fund its exploration programs in Chile and Argentina. It began its inaugural drill program at Lunahuasi on October 17.
Company Profile
Year-to-date gain: 93.48 percent; market cap: C$43.91 million; current share price: C$0.445
DLP Resources is a base metals exploration company with interests in Peru and Southern BC. Its primary site is Aurora, a porphyry copper-molybdenum project north of Cuzco, Peru. The site’s previous exploration in 2001 and 2005 revealed significant mineralization, and DLP acquired the property via an earn-in agreement with a private Peruvian group in May 2021.
The company began the year with an upsized private placement of C$1.41 million, with funding to be used for the continued exploration of its projects in Peru. Drilling of the fourth hole at the Aurora site began in February and results were released on May 5, with one interval grading 0.98 percent copper equivalent over 198.9 meters.
Drilling at Aurora continued through the second and third quarters, with positive results in June that showed mineralization in drill holes five and six. Hole five was a step out of 317 meters from the third hole, and the sixth hole, located 448 meters from hole three, extended mineralization further. Hole six showed copper equivalent results including 1.01 percent over 208 meters.
Shares of DLP reached a year-to-date high of C$0.71 on July 9 after starting the year around the C$0.285 mark.
In its most recent news, released on October 11, DLP confirmed that the mineralized trend has reached at least 980 meters based on encouraging results from the first 11 drill holes at the site; it also said that results from drill hole 12 are expected in early November.
Company Profile
Year-to-date gain: 92.31 percent; market cap: C$12.45 million; current share price: C$0.25
Focused on the exploration of high-grade copper, silver, lead and zinc projects, Intrepid Metals introduced the Corral copper project in February as a new, district-scale exploration project with over 50,000 meters of historic drilling that hosts significant shallow copper intercepts, including 1.24 percent over 126.2 meters.
Shares of Intrepid saw their greatest gains at the end of the third quarter, moving from a near year-to-date low of C$0.125 on August 28 to a year-to-date high of C$0.30 on October 3.
These gains came along with the company's September 12 consolidation of an established 3 kilometer copper and gold trend within the Corral copper project, following Intrepid's acquisition of the MAN property from Mining and Mineral Opportunity. This acquisition brings its total land package to over 9,500 acres.
According to the company, despite strong results from historic drilling along the trend, the fragmented nature of the claims in the region prevented meaningful investment and development of resources.
Intrepid reported the approval of the deal from the TSXV on October 4 subject to equity financing, which must occur by December 10, and shared an update on its planning for Corral the following week.
Company Profile
Year-to-date gain: 50.65 percent; market cap: C$110.29 million; current share price: C$0.58
Doubleview Gold is focused on critical metals projects. Its portfolio includes the Hat polymetallic porphyry deposit, which holds significant copper, cobalt and scandium mineralization, and the Red Spring copper-silver-gold property.
Shares of the company reached a year-to-date high of C$0.70 on February 28 following news issued by Doubleview on February 6 that it had achieved 56 percent scandium recoveries in its initial testing of flotation tailings from Hat. It believes this discovery has the potential to provide the first major source of scandium in North America. The discovery was further validated when the company announced a total recovery rate of greater than 90 percent on September 26.
Exploration results from the Hat site as reported on May 8 and June 1 show greater potential for the site to be a significant source of critical metals, with a highlighted intercept of 0.15 percent copper, 87.4 g/t cobalt and 29.5 g/t scandium over 459 meters.
Testing on the site through the third quarter has allowed Doubleview to extend the project’s main Lisle zone by 120 meters, the company reported on October 24. Testing for the season has exceeded 9,000 meters and the limits for the deposit have not been identified.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Additional information on Copper stock investing — FREE
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Figure 1: Plan view of the Fortuna Project showing the location of the Lucero Discovery.(Vaca Muerta historic sampling results refer to ASX announcement 7 August 2023, El Quillay historic sampling results refer to ASX announcement 11 September 2023 and Piedra Dura historic sampling results refer to ASX announcement 1 November 2023)
