All signs pointing to continued copper bull run as production tipped to increase in 2021

Australian copper explorers and producers are quietly confident of a bumper year as market fundamentals continue to paint a positive picture for the highly sought-after metal. According to research by leading data and analytics company GlobalData, copper production from the top 10 companies is set to increase by up to 3.8% in 2021. That comes after the worldwide COVID-19 pandemic pushed copper production at those companies down by 0.2% in 2020 to 11.76 million tonnes. GlobalData associate project manager Vinneth Bajaj said investors in copper could look forward to production increases this year. “Robust growth is expected from Freeport McMoRan, which provided 1,723.6kt of copper guidance for 2021, 18.5% higher versus 2020 output, backed by the commencement of its recently expanded Grasberg mine in Indonesia,” he said. “Additionally, around 9.1% growth is expected from First Quantum and 5.3% higher copper cathode output is expected from Jiangxi. “The growth will also be supported by production from other operating mines such as Escondida, Collahuasi, El Teniente, Cerro Verde, Buenavista and Antamina.” Sky-high prices The production growth is supported by sky-high copper prices. On Wednesday, the copper price was fetching US$10,465/tonne, just shy of the US$10,724/tonne peak it hit earlier this month. The only other time in history copper peaked above US$10,000/tonne was in 2011 on the back of Chinese economic stimulus and a 2000s commodities boom. It was only December last year that Goldman Sachs was predicting copper could hit five figures by the first half of 2022; the bull run has exceeded even its predictions. Goldman Sachs now believes it could reach as high as US$15,000/tonne by 2025. Copper in 2020 The highest increase in copper production in 2020, despite COVID-19, was by Canada’s First Quantum, which reported 10.4% growth. Other top 10 companies experienced growth as well, Bajaj said. “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020,” he said. “The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.” “Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). “Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.” Australian copper hopefuls In Australia, much activity is occurring in the hot copper district of the moment, the Lachlan Fold Belt, where companies like Kincora Copper Ltd (CVE:KCC) are trying to replicate the earlier successes of the now established mid-tier company Alkane Resources Ltd (ASX:ALK). Recently, Latin Resources Ltd (ASX:LRS) (FRA:XL5) enhanced its exposure to copper amidst strong market fundamentals by acquiring 2.7 million shares worth C$540,000 in a private placement by Westminster Resources Ltd (CVE:WMR) (OTCMKTS:WMRSF). Alicanto Minerals Ltd (ASX:AQI) has intersected semi-massive sulphide skarn mineralisation with visual chalcopyrite in the second hole drilled at the Stone Lake target within the Greater Falun copper-gold project in Sweden. Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) is set to begin an aggressive 2021 exploration program at Mt Oxide Copper Project in northwest Queensland coinciding with the “massive global transformation” in the copper market. Comet Resources Ltd (ASX:CRL) has finalised due diligence and completed the acquisition of a portfolio of highly prospective copper assets from Bath Resources Pty Ltd in Australia’s Northern Territory, with added gold-zinc-silver-lead. Aeris Resources Ltd (ASX:AIS) has welcomed strong ongoing copper results from joint venture partner Helix Resources Ltd (ASX:HLX) at the Canbelego Copper Project in proximity to its Tritton Copper Operations in central NSW. And Havilah Resources Ltd (ASX:HAV) intends to begin near-term mining its gold open pit starter project to help fund development of the large copper resource at the Kalkaroo Project in South Australia. - Daniel Paproth