The price of copper hit its highest level in nearly four months last week. Investors expect copper supply to be squeezed by the Panama government’s decision to close First Quantum Minerals’ Cobre mine, which is responsible for 1.5% of global production. Here is a collection of stocks to watch for opportunities in the copper industry.
- Taseko Mines produced 35 million pounds of copper at its flagship Gibraltar project in Q3, up 25% from Q2.
- Ero Copper’s Tucumã project in Brazil is 70% complete; $111m has been raised to support growth initiatives.
- Ivanhoe Mines is to kickstart exploration activities in “underexplored” Angola.
First Quantum Minerals
The Mine Shutdown Stock
First Quantum Minerals [FQVLF] was ordered by the Panama government to shut down its Cobre copper mine last week. According to a deal agreed in 2022, the miner will pay $375m in royalties annually in exchange for mining rights over 20 years. However, the contract has proved controversial and was met by protests and legal challenges. In response to the government’s decision, First Quantum Minerals stated that “transparency and compliance with the law has always been fundamental for the development of its operations and remains open to constructive dialogue in order to reach consensus.”
The Higher Grade Stock
Taseko Mines [TGB] announced in October that its flagship Gibraltar project produced 35 million pounds of copper in Q3 2023, up 25% from the previous quarter thanks to higher grades. “Mining in the Gibraltar pit is progressing on plan,” commented Taseko CEO Stuart McDonald in an October press release. Gibraltar is the second-largest open-pit copper mine in the whole of Canada. The Taseko Mines share price is up 15.5% in the past month through 1 December.
The Capital Raise Stock
Ero Copper’s [ERO] Tucumã project in Brazil is 70% complete, the miner has announced. “As we continue to meet our construction milestones, we are turning our attention on site to piping, electrical and instrumentation installation,” said CEO David Strang in a press release, adding that production is on track to start in the second half of 2024. A capital raise of $111m has also been announced to fund strategic initiatives, including supporting future growth at the Tucumã project.
The Angola Exploration Stock
Ivanhoe Mines [IVPAF] is to start exploration activities on 22,195 square kilometres of land in Angola, the miner revealed last week. CEO Robert Friedland said in a statement that Angola was an “underexplored” region that “could host an extension of the Central African Copperbelt”. The permit is for five years, but this could be extended to seven; Ivanhoe Mines has pledged to invest an initial $10m. The Ivanhoe Mines share price has surged 27.2% in the past month.
The Artefact Disturbance Stock
Sandfire Resources [SNDFY] issued an apology last month for destroying Aboriginal artefacts at the Monty mine that forms part of its DeGrussa copper operations in western Australia “Our local communities are of critical importance to us and we will work hard to rebuild our relationship with the traditional owners,” said CEO Brendan Harris in a statement on the damage that occurred in 2017 and 2018.
Another Way to Invest in Copper
The Global X Copper Miners ETF
The Global X Copper Miners ETF [COPX] holds the stocks of all five companies. The fund is a pure-play on the copper theme and 99.8% of its portfolio is allocated to the materials sector, with just 0.2% allocated to industrials. The fund is flat in the past year through 1 December and up 1.6% in the past six months.
The Sprott Junior Copper Miners ETF [COPJ] holds Ero, Ivanhoe, Sandfire and Taseko. The fund is pure-play focused on small, exploration- and development-stage copper miners with potential for revenue and asset growth. The fund is down 11% since it launched in February and down 2.3% in the past six months.
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