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Friday Five

9th Dec 2022

The operation will concentrate on processing historically mined finds over the next 16 months to produce copper cathodes and cobalt hydroxide.

 

The operation will ramp up over the coming months to its full capacity producing, on average, 1800 t of copper cathode and 300 t of cobalt hydroxide a month, by March 2023.

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Great to see Ring of Fire Metals and Webequie First Nation working together to progress ongoing exploration activity in the region and to negotiate a partnership agreement for the proposed Eagle’s Nest mine.

It's also great to see that this agreement is focused on developing one of the world's largest undeveloped, high-grade nickel-copper-platinum-palladium deposits. This mine will have an initial mine life of 11 years with the potential for a nine-year extension.

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The world is experiencing a copper shortage. Global demand for the orange metal is expected to rise by more than 50% over the next decade, but supply will not be able to keep up.

In order to close this gap between supply and demand, companies need to invest billions of dollars into new mines that can produce more than 31 million tonnes of copper per year by 2032. If these new projects do not come into operation soon enough—meaning before 2026—then we will start seeing an imbalance between supply and demand for copper.

"If new mining projects do not come into operation," warned Maximo Pacheco, chairman of the board of Codelco, "the imbalance between supply and demand will begin to be noticed during the second half of this decade, in 2026."

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Glencore's decision to shelve plans for a giant A$2 billion ($1.3 billion) coal mine in Australia’s Queensland state, which would have become one of the country’s largest, is a stark reminder of how far the global energy transition has come.

Glencore's move also fits with Glencore's strategy to phase out emissions, which includes keeping its thermal coal mines until depletion by the mid-2040s. The company’s goal is to halve its scope 1, 2 and 3 emissions by 2035 and hit net-zero carbon emissions by 2050.

Construction at the Valeria open pit metallurgical and thermal coal mine was planned to begin in 2024. It would have created 1,400 construction jobs and 1,250 operational posts over its 37-year life

The volatility and disruptions sparked by Russia's invasion of Ukraine war have helped create the most profitable period in history for the companies that move energy, metals and crops around the world.

Trafigura Group earned a record $7 billion in its last financial year, more than the previous four years combined, as the commodities trader cashed in on wild price swings and arbitrage opportunities.

It's interesting to see how companies deal with the recent volatility in commodity prices. While Trafigura has been successful in its energy trading, its metals division is not doing as well. Due to soaring energy costs, the company attributes this to lockdowns in China and a loss at its zinc smelting unit Nyrstar.

 

It will be interesting to see if these trends continue over time or if they are just temporary fluctuations.