Gold stocks break 2011 record high as investors seek safe havens
Europe’s fledgling lithium dreams face pivotal test in Portugal
Burkina Faso seeks to ease worries around mining stake plans
Cobre Panamá environmental audit ready to begin, says minister
Zijin said to plan $3 billion HK IPO in world’s biggest listing since CATL
Copper price retreats from five-month high as traders weigh China outlook
Gold stocks break 2011 record high as investors seek safe havens
Trade anxiety, geopolitics and threats to the US central bank’s independence have driven investors to the safety of gold, sparking a massive rally in miners of the precious metal.
The NYSE Arca Gold Miners Index hit an all-time high and is on track to end the session at a record on Friday. It’s the first new peak since 2011 when investors were snatching up safe-haven assets amid Europe’s debt crisis and the first US credit rating downgrade. This time, a new sense of uncertainty has sent some of the largest stocks in the benchmark soaring, with Newmont Corp., Agnico Eagle Mines Ltd., Wheaton Precious Metals Corp. and Barrick Mining Corp. all gaining more than 80% this year.
Investors contending with global instability from trade wars and conflict in the Middle East and Ukraine, are once again seeking assets that offer shelter. US President Donald Trump’s efforts to oust Federal Reserve governor Lisa Cook and a lack of clarity on the central bank’s plan on lowering interest rates have further ignited gold prices, and with it the companies that mine it.
“All my gold companies, the return on equity has proven to be almost twice as high as it was last year because the margin that they get from selling that gold has increased,” said Martin Pradier, a Veritas Investment Research analyst. “So of course they should be hitting all time highs.”
Europe’s fledgling lithium dreams face pivotal test in Portugal
Mina do Barroso is set to be Europe’s first significant producer of spodumene
Savannah Resources Plc is preparing for a pivotal stage in Europe’s push to secure battery metals, as it lines up financing for what could become the bloc’s largest domestic source of lithium.
The London-listed firm is completing a feasibility study at its Barroso project in northern Portugal and has started structuring funding for construction, which is expected to require €300 million ($350 million) to €350 million over the next two and a half years.
The European Union designated Barroso a strategic project earlier this year, a move that Savannah expects to unlock funding that will help defray an unspecified portion of the cost. The company has so far relied on its own resources, according to chief executive officer Emanuel Proença, spending about €50 million since securing the concession in 2017.
“Projects of this kind, with this strategic profile, would normally already have received EU development support at this stage,” Proença said in an interview at the company’s Lisbon offices. “I would expect there will be some kind of support fund going forward, repayable or not, to accelerate the project’s development. The construction phase is the largest financial outlay.”
The company is pushing ahead with its project at a challenging moment for the global lithium industry. Established producers in Australia, Chile, and China are facing steep losses as oversupply continues to pressure the market. A recent rebound in lithium prices has fueled hopes of a recovery, but many producers stand ready to ramp up output if the rally holds.
Burkina Faso seeks to ease worries around mining stake plans
Burkina Faso has moved to reassure investors that its request to acquire an additional 35% stake in West African Resources’ (ASX: WAF) Kiaka gold mine is an option, not a demand, under the country’s new mining framework.
Speaking at a mining conference in Australia, Mamadou Sagnon, director-general of the mining registry, explained that the Mining Code introduced in July last year allows the state to secure a minimum 30% paid interest in mining projects, in addition to its 15% free-carried stake. The paid portion is linked to exploration and feasibility costs rather than the mine’s market valuation.
The Code also gives the government and local investors the right to acquire further equity on commercial terms.
“In the case of West African Resources, the government addressed a letter to solicit the opening of participation up to 35%,” Sagnon said. “For the moment, it is a solicitation – it is not forcing.”
Sagnon stressed that the measure was intended to strengthen confidence in the sector, rather than deter foreign capital.
Cobre Panamá environmental audit ready to begin, says minister
Aerial view of Cobre Panama’s flotation tanks.
Panama is expected to have all information necessary to make a decision on First Quantum’s (TSX: FM) shuttered copper mine by the end of this year, according to its Minister of Commerce and Industry Julio Moltó.
Speaking with local media this week, Moltó confirmed that the terms of reference for Cobre Panamá’s environmental and comprehensive audit have been consolidated into a single review process. He added that the Ministry of Environment has already selected the firm responsible for conducting the audit, which was slated to begin this month.
“I understand that the company has been defined, and the audit should commence shortly, pending the awarding of the contract and allocation of resources,” he stated in an interview with Panamanian news outlet Telemetro Reporta.
“I estimate that this audit will take four to five months at most, so we should have essential information before the year ends. This will allow us to continue making informed decisions while ensuring the safe management plan remains in effect,” Moltó said.
First Quantum Minerals’ stock rose 1.4% on Friday, showing strength in a week during which it set a new 52-week high. The company has a market capitalization of C$20.5 billion ($14.8bn).
Zijin said to plan $3 billion HK IPO in world’s biggest listing since CATL
Zijin Mining Group Co.’s public spin-off of its international gold business could fetch more than $3 billion, according to people familiar with the matter, putting the planned Hong Kong listing on course to be the world’s second-biggest this year.
The value and timing of Zijin Gold International Co.’s initial public offering could still change as deliberations are ongoing, the people said, asking not to be identified discussing a private matter. The listing could come as soon as this month and investor interest in the offering has been exceptionally strong at a time of record-high prices for the precious metal, one of the people said.
A $3 billion IPO would be the biggest globally since Chinese battery giant Contemporary Amperex Technology Co. Ltd. raised $5.3 billion in a blockbuster Hong Kong offering in May. Zijin is the world’s third-biggest metals miner company by market value, and wants to boost output from gold mines that span Central Asia to Africa and Latin America.
“Zijin needs a large pool of offshore money to invest and expand production in their assets,” said Xiaofeng Li, senior partner at Beijing Dentons who is experienced in advising Chinese natural resource firms on overseas deals.
Copper price retreats from five-month high as traders weigh China outlook
Copper prices pulled back on Wednesday after briefly touching their highest levels since late March in London, as traders balanced concerns over supply with an uncertain demand picture from China.
On the London Metal Exchange, copper climbed as much as 0.6% to $10,038/tonne. The red metal gained 3% in August and remains up about 14% so far this year.
Meanwhile, COMEX futures were steady, with the most-active contract slipping 0.14% to $4.638 per lb ($10,203/t) on Wednesday morning.
China concerns
A weaker US dollar and the prospect of interest rate cuts have underpinned prices in recent weeks. But the market remains focused on China where signs of slowing industrial activity are raising doubts about demand.
China’s official factory gauge for August pointed to a rapid contraction amid subdued demand, while analysts including Goldman Sachs have flagged softer conditions in the second half of the year.
Still, some observers are more optimistic. Higher import premiums, relatively low inventories for this time of year, and potential supply constraints are lending support.
Several Chinese smelters are scheduled to undergo maintenance in September, according to Jia Zheng, head of trading at Shanghai Soochow Jiuying Investment Management Co.
“With reduced supply and stable demand, inventory levels are expected to decrease, which will support upward price moves,” Jia said in a text message.
Market recovery
Copper has staged a strong recovery after earlier turbulence linked to global trade tensions. Inflows of material to the US ahead of tariffs have tightened supplies elsewhere, keeping US futures at a premium over LME prices.
The market now faces a tug of war between supportive supply-side dynamics and uncertainty over whether China’s economic slowdown will curb demand growth through the remainder of 2025.
