Copper prices unlikely to reach lows hit in 2008 – First Quantum
Miner First Quantum Minerals does not expect copper prices, down almost 27 percent since the start of September, to reach lows hit in 2008 as constrained supply and healthier mining companies underpin the price. “I don’t see that happening this time around. The world is very different, and the mining sector is in a very different place in terms of gearing and availability of cash … it is in a much stronger (position),” First Quantum President Clive Newall said in an interview.Echoing comments on demand made by other copper producers this week, Newall said there had been no signs of cutbacks from customers and that a Chinese return to the market for restocking was inevitable, though the timing was hard to predict.
“We haven’t seen any of the early signs of pushback that you tend to get in tough markets, when people try to delay payment,” Newall told Reuters. “We haven’t seen any of that, and talking to other copper producers, I am not sure anyone is really seeing it.”
He said the copper price was at the lower end of the expected range but “not dramatically low”, though he warned it was getting close to or already below the incentive cost for new mines to be developed.
“It is going to delay future development if (the price) stayed at these levels for any length of time,” he said.
First Quantum currently produces the bulk of its output at the Kansanshi copper-gold mine in Zambia, Africa’s largest copper mine.
Newall declined to comment on expectations for Zambia’s new president and on a surprise move by the new government this week to suspend metal export permits.
Newly elected President Michael Sata has been concerned that copper exporters are misreporting the amount of ore leaving the country. Last week he said all export payments would have to be routed via the central bank.
Newall also declined to comment on market rumours the company would consider selling its Guelb Moghrein project in Mauritania. Sources familiar with the matter said last month that Rick Clark, the former chief executive of Red Back Mining, had approached First Quantum with a view to buying the copper-gold project.
One of the sources has since said the First Quantum board is waiting for a firm bid to materialise, though it is unclear whether Clark could raise the financing in current markets.
First Quantum also plans to enter the nickel market with the Ravensthorpe and Kevitsa projects, in Australia and Finland respectively, in 2012.
It has also been actively tapping new copper deposits, with the Sentinel copper deposit in Zambia, where it has locked in deliveries for long lead items of equipment and is expecting completion in 2014, and the Haquira copper deposit in Peru, adjacent to Xstrata’s Las Bambas.
Newall said First Quantum could consider listing depositary receipts on the Lima exchange, increasingly popular with miners looking to develop assets in the region, following its steps in Zambia, where it listed in July.
First Quantum is also close to appointing a new chief financial officer, replacing Mark Bolton who resigned in August. Newall said the company had a shortlist of three and would make an announcement “very soon”.
“We haven’t seen any of the early signs of pushback that you tend to get in tough markets, when people try to delay payment,” Newall told Reuters. “We haven’t seen any of that, and talking to other copper producers, I am not sure anyone is really seeing it.”
He said the copper price was at the lower end of the expected range but “not dramatically low”, though he warned it was getting close to or already below the incentive cost for new mines to be developed.
“It is going to delay future development if (the price) stayed at these levels for any length of time,” he said.
First Quantum currently produces the bulk of its output at the Kansanshi copper-gold mine in Zambia, Africa’s largest copper mine.
Newall declined to comment on expectations for Zambia’s new president and on a surprise move by the new government this week to suspend metal export permits.
Newly elected President Michael Sata has been concerned that copper exporters are misreporting the amount of ore leaving the country. Last week he said all export payments would have to be routed via the central bank.
Newall also declined to comment on market rumours the company would consider selling its Guelb Moghrein project in Mauritania. Sources familiar with the matter said last month that Rick Clark, the former chief executive of Red Back Mining, had approached First Quantum with a view to buying the copper-gold project.
One of the sources has since said the First Quantum board is waiting for a firm bid to materialise, though it is unclear whether Clark could raise the financing in current markets.
First Quantum also plans to enter the nickel market with the Ravensthorpe and Kevitsa projects, in Australia and Finland respectively, in 2012.
It has also been actively tapping new copper deposits, with the Sentinel copper deposit in Zambia, where it has locked in deliveries for long lead items of equipment and is expecting completion in 2014, and the Haquira copper deposit in Peru, adjacent to Xstrata’s Las Bambas.
Newall said First Quantum could consider listing depositary receipts on the Lima exchange, increasingly popular with miners looking to develop assets in the region, following its steps in Zambia, where it listed in July.
First Quantum is also close to appointing a new chief financial officer, replacing Mark Bolton who resigned in August. Newall said the company had a shortlist of three and would make an announcement “very soon”.
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