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Australian miners swoop on Glencore copper opportunities as commodity price rises

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Glencore’s choice to dump a number of of its Australian copper mines is being described as a win for small mining corporations by business analysts.

The transfer comes as international demand for copper, dubbed “the brand new oil”, reaches unprecedented highs.

Australian agency Comet Assets not too long ago signed a deal to amass Glencore’s Mount Margaret copper venture in north-west Queensland.

Final month, Glencore entered right into a binding settlement to promote its CSA mine in New South Wales, whereas Evolution Mining has taken over the Ernest Henry website in Queensland after the same deal was introduced final yr.

As copper-hungry industries like development, transport, power and renewables demand extra of the pink metallic, international stockpiles are operating low.

A large piece of bright blue rock that is native copper from Sandfire mine, WA
Growing demand for copper is placing strain on finite international stockpiles.(ABC Rural: Babs McHugh)

Copper costs jumped 130 per cent final yr, and its worth per pound reached an all-new excessive of $4.9USD final month.

BHP’s head of mineral operations for the Americas Rag Udd says the world continues to have an insatiable urge for food for copper.

Copper costs prone to rise additional

MineLife senior sources analyst Gavin Wendt stated Glencore’s strikes had nothing to do with a insecurity within the sector.

“Within the broad scheme of issues, it is no shock that an organization of Glencore’s measurement can be seeking to offload initiatives like these – these belongings actually aren’t essentially of relevance when it comes to scale now,” Mr Wendt stated.

“It is all about market timing. We have seen copper costs at report ranges, and [are] probably set to go greater.

“For Glencore, it is extra a matter of offloading smaller operations than it’s offloading copper particular initiatives.”

In an announcement final November to announce the Ernest Henry deal, Glencore stated its dedication to north-west Queensland would proceed with the Mount Isa Mines copper and zinc complicated, copper smelter and Townsville copper refinery.

A man works in a furnace wearing protective equipment.
Glencore nonetheless owns a number of copper mines together with the Mount Isa asset.(Equipped: Glencore)

Glencore was contacted by the ABC for additional remark.

Smaller corporations getting a ‘foothold’

Mr Wendt stated the gross sales have been a win for small Australian mining corporations searching for a leg up within the sources sector.

A chunk of mined copper.
Dubbed “the brand new oil”, international demand for copper has reached unprecedented highs this yr.(Equipped: Virginia Tapp)

“These mines are good when it comes to scope and scale for smaller, impartial producers, maybe that want to get a foothold into the market when it comes to buying a producing asset,” he stated.

Evolution Mining, the brand new house owners of Glencore’s Ernest Henry website, stated it will make investments extra consideration into the mine.

“The massive factor that may change is that this goes from being a comparatively small asset within the Glencore portfolio to a really massive asset within the Evolutions portfolio,” the corporate’s government chairman Jake Klein stated.

“The present mine life is 5 years, however we might wish to see this have a 15- to 20-year life.”

International want for Australian copper

Australia is among the many prime 10 greatest producers of copper on this planet.

With COVID-19 and rising prices stifling international productiveness, and with fewer copper deposits being found, funding financial institution Goldman Sachs predicts that copper demand will improve practically 600 per cent come 2030.

Australian miners are desirous to fill the gaps.

A map of Australia showing copper mine sites.
Australia is among the many prime 10 international producers of copper.(Equipped: Geoscience Australia)

Comet Assets managing director Matthew O’Kane stated copper had turn into a “actually crucial commodity on this planet today”.

“We see vital potential for the expansion of this useful resource, it is a actually transformational alternative for us,” Mr O’Kane stated concerning the firm’s buy of Glencore’s Mount Margaret mine.

The way in which the market goes, Mr Wendt expects to see increasingly more of the pink metallic extracted from Australian soil.

“Copper goes to be one of many key commodities of the renewable power sector,” Mr Wendt stated.

“It will be in ever-greater demand, and that may imply a really sturdy worth outlook driving much more exercise in Australia going ahead.”