The big crunch is here as copper decouples from market cycles, Bank of America says
Saudi Arabia to invest $1bn in Reko Diq mining project
Ferrosilicon, magnesium projects in Oman to boost MDO’s downstream portfolio
LME bans Russian-origin metal after UK, US impose new sanctions
Gold prices at a record high are keeping pawn shops busy
Illegal workers arrested at Posco Argentina operation
The big crunch is here as copper decouples from market cycles, Bank of America says
Copper is increasingly ‘dancing to its own tune’, with prices of the red metal forecast to reach about $12,000 per tonne by 2026, say Bank of America analysts.
BofA analysts are tracking an energy transition and technology-driven decoupling of the metal from traditional commodity markets and broader economic cycles. Tight copper mine supply is increasingly constraining refined production, the bank said, adding the lack of mine projects is finally starting to affect markets, according to Michael Widmer, a commodity strategist and co-author of an April 8 report.
“The pronounced lack of new mine projects has begun to bite, constraining refined copper production and spotlighting years of underinvestment in copper exploration and development,” Widmer wrote.
The tension between demand and supply, coming as capital costs at mines rise while copper prices are slower to catch up, leads to significant price projections and concerns over the metal’s availability for essential technologies in the near term. The bank’s price forecast reflects the severity of the supply constraint amidst rising demand.
Saudi Arabia to invest $1bn in Reko Diq mining project
Future agreements are expected to expand Saudi participation in Pakistan's energy sector
Saudi Arabia is poised to invest up to $1 billion in the Reko Diq Copper Gold project in Pakistan’s Chagai district, Balochistan next month.
This announcement was made by the Information Ministry and underscores a strengthening of economic ties between the two nations.
The forthcoming Saudi investment is expected to further boost Pakistan’s mining sector, which is a critical component of the country’s economy.
In preparation for this substantial investment, Pakistan’s Special Investment Facilitation Council (SIFC) has been actively working to address and remove any potential obstacles.
This proactive approach is aimed at ensuring a seamless investment process.
Additionally, Prime Minister Shehbaz Sharif is taking steps to ensure the effective administration of this investment.
He plans to establish a committee within the Finance Ministry that will include all relevant stakeholders in Pakistan. This committee aims to facilitate the execution and completion of the Saudi investment.
Previously, in November 2023, Barrick Gold Corporation’s CEO, Mark Bristow, mentioned the possibility of Saudi Arabia acquiring a stake in Reko Diq.
This potential equity purchase would involve partial ownership by Saudi Arabia, a move supported by Barrick Gold, the world’s second-largest gold producer.
Ferrosilicon, magnesium projects in Oman to boost MDO’s downstream portfolio
Muscat: Underscoring its commitment to creating value from Oman’s mineral resources, Minerals Development Oman (MDO) – the country’s leading mining sector player – plans to participate in two key projects centring on the production of ferrosilicon and magnesium metal. The two ventures, when operational in the coming years, will bolster MDO’s expanding downstream investment portfolio.
Ferrosilicon – an alloy of iron and silicon – is a strategically important commodity because of its extensive use in the production of steel, cast iron and low carbon ferroalloy. Its local availability has the potential to spur investments in an array of industrial and manufacturing projects that rely on cost-competitive ferrosilicon as a raw material.
But rather than invest in a capital-intensive, green-field plant, MDO aims to harness the existing assets and capabilities of its wholly-owned subsidiary Oman Mining Company (OMCO).
Launched in 1979, OMCO mined mainly copper ore from sites in Suhar and Yanqul. To support its operations, OMCO also invested in a concentrator, smelter and refining facilities with a capacity to produce around 20,000 metric tonnes of copper. Upon the depletion of copper reserves within its concessions, OMCO transformed its Suhar processing complex into a toll smelting operation. This enabled international traders to ship their copper concentrate to Suhar to be smelted into copper cathodes for a fee. The smelter is now proposed to be repurposed to support the production of ferrosilicon in Oman, according to MDO.
LME bans Russian-origin metal after UK, US impose new sanctions
Nornickel copper production
The London Metal Exchange (LME) on Saturday banned from its system Russian metal produced on or after April 13 to comply with new US and UK sanctions imposed for Russia’s invasion of Ukraine.
The sanctions aim to restrict revenues for Russia from the export of metal produced by companies such as Rusal and Nornickel that help to fund its military operations in Ukraine.
The US Treasury Department and the British government on Friday prohibited the 147-year old LME and the Chicago Mercantile Exchange (CME) from accepting new Russian production of aluminum, copper and nickel.
If an owner of Russian metal can provide evidence that it was produced before April 13, it can still be put on LME warrant – a title document conferring ownership, the LME said.
“Russian metal warrants issued on or after 13 April 2024 for metal produced before 13 April 2024 are still subject to restrictions that prevent UK LME Members and clients from cancelling or withdrawing the corresponding metal unless they are doing so for the account of a non-UK Client,” the exchange said in a statement.
Gold prices at a record high are keeping pawn shops busy
Investors and metals traders can’t agree on what exactly is behind gold’s recent rally. At King Gold & Pawn in Brooklyn, the customers don’t care. They just want to sell.
For some, sky-high values simply mean it’s a good time to cash in; It’s hard to ignore record prices that climbed above $2,400 an ounce last week. For others, it’s a more desperate move to get money for bills and rent. Whatever the need, what’s clear is jewelers and pawn shops are seeing a flood of sellers.
“People are using gold as an ATM they never had,” said Gene Furman, owner of King Gold & Pawn and Empire Gold Buyers. At Furman’s 5th Avenue store, the number of people coming in selling and pawning gold jewelry is more than three times above normal levels since prices started to rally in late February.
Among them is Branden Sabino, a 30-year-old IT specialist, who sold a gold necklace and a gold ring last week.
“Prices are high, and I need cash,” he said, adding that with the cost of rent, groceries and car insurance rising, he doesn’t have any savings.
The speed and magnitude of gold’s ascent is astonishing — since the 2024 low in mid-February, it has rallied 17%.
Investors typically seek safety in gold for fear of political, economic and financial crises. Escalating tensions in the Middle East, a war in Ukraine, and an upcoming US election are now underlining its traditional role as a haven asset once again. At the same time, some investors have been betting that inflation may stick higher in the long run, underpinning gold’s run.
Illegal workers arrested at Posco Argentina operation
Argentina’s National Migrations Directorate, National Labour Directorate and Federal Police carried out an operation in the northwestern Salta province that ended up with 15 people arrested for working illegally for Posco Argentina, a subsidiary of South Korea’s Posco.
The illegal workers had entered Argentina under tourist visas and started working for the mining company at the Güemes Industrial Park.
Together with Canada’s Lithium South Development, Posco is developing the Hombre Muerto lithium project. Phosphate from Hombre Muerto is transported by train to a plant in Güemes for processing.
Following the arrests, the Asian miner issued a statement saying that the company did not directly employ the workers as they were subcontractors.
“It is important to emphasize that all of them entered lawfully and had no criminal record,” the communiqué reads. “Sanctions will be applied to any contracting company that does not comply with regularizing the situation of its employees. It is important to clarify that all direct personnel of Posco Argentina work in compliance with the laws and regulations of the country. The company’s actions are guided by the highest ethical and legal standards, which is why we deeply regret this situation.”
In response to Posco, the Salta Chamber of Mining Companies Suppliers (Capemisa) released a statement saying its members support all the controls and inspections carried out by authorities as laws must be complied with at the national, provincial and municipal levels.
Capemisa used the opportunity to make some observations related to the way the province’s mining industry is operating.
