So far in 2021, the price of copper reached a record high before falling back slightly as the coronavirus pandemic continues to hit all markets around the world.
For investors interested in the red metal, it’s worth looking at copper production by country. According to the latest US Geological Survey data, global copper production reached 20 million metric tons (MT) in 2020.
Which country was the top copper producer in 2020? Chile took the top spot again, although some of the others on the list may surprise you. Read on to find out which nations made the grade.
Mine production: 5.7 million MT
Copper production in Chile declined slightly between 2019 and 2020, landing at a total rate of 5.7 million MT last year.
Despite COVID-19, copper-mining companies, including state-owned Codelco, BHP (ASX:BHP,NYSE:BHP,LSE:BLT), Anglo American (LSE:AAL), Glencore (LSE:GLEN) and Antofagasta (LSE:ANTO), have been churning out significant amounts of copper. However, the country remains one of the hardest-hit Latin American nations in terms of the virus. After copper output levels recovered in the first half of the year, the second half of 2020 brought further declines in copper production.
Mine production: 2.2 million MT
Peruvian copper production declined from the previous year, down from 2019’s total of 2.46 million MT. The main copper operations in Peru include Anglo American’s (LSE:AAL,OTCQX:NGLOY) Quellaveco mine and Southern Copper’s (NYSE:SCCO) Tia Maria mine.
The majority of copper produced in the country is shipped to China, followed by Japan, South Korea and Germany, among others. Copper output in the country has grown more than 97 percent from 2008 to 2019, but 2020 told a different story.
The pandemic has hit copper production in the country, bringing output down 20.4 percent in the first half of 2020 versus the same period in 2019, as the government implemented strict measures to contain the virus. Copper miners resumed operations in June.
Mine production: 1.7 million MT
China, the world’s largest copper consumer, remained in third place for production in 2020. Its production increased slightly last year, up from 1.68 million MT in 2019.
It’s worth mentioning that the trade war between the US and China has meant high tariffs for Chinese exports. At the start of 2020 the promise of a phase one deal brought renewed strength the copper market, and in May US copper concentrate was once again entering China’s ports.
4. Democratic Republic of Congo
Mine production: 1.3 million MT
Copper production from the Democratic Republic of Congo (DRC) last year remained relatively flat. Production rates ticked up a notch from 2019’s 1.29 million MT to 1.3 million MT in 2020.
One major copper asset on the rise in the DRC is Ivanhoe Mines’ (TSX:IVN,OTCQX:IVPAF) Kamoa-Kakula project, a joint venture the company shares with partner Zijin Mining Group.
5. United States
Mine production: 1.2 million MT
Taking fifth place in copper production by country is the US, which saw its copper output decline marginally in 2020, from 1.26 million MT in 2019. According to the US Geological Survey, the decrease was due to reduced output from the Bingham Canyon Mine in Utah (lower grades) and the Chino Mine in New Mexico (COVID-19 suspended operations).
Most of the country’s production comes from Arizona, New Mexico, Utah, Nevada, Montana, Michigan and Missouri; 18 of the 25 mines account for 99 percent of the country’s mine production.
One of the US’ biggest copper assets is the Bingham Canyon copper mine, part of Rio Tinto’s (NYSE:RIO,ASX:RIO,LSE:RIO) Kennecott operations.
The US also ranks among the top five exporters of copper into the global market, mainly in the form of ores and concentrates, but also as refined copper. China is a major importer of US copper, and the recent trade war between the two countries has had a significant impact on worldwide copper trade. The trade war mentioned above also of course affects the US.
Mine production: 870,000 MT
Coming in under the 1 million MT mark is Australia, whose copper production declined from 934,000 MT in 2019 to 870,000 MT in 2020.
One of Australia’s largest copper operations is BHP’s Olympic Dam copper-uranium–gold deposit in South Australia; while the asset is more known for its uranium production, it maintains a strong stance as the fourth largest copper deposit in the world.
Also worth noting is Queensland’s Mount Isa, run by a subsidiary of Glencore (LSE:GLEN,OTC Pink:GLNCY). It is one of Australia’s largest copper producers, and the two copper mines that operate out of Mount Isa collectively process 6.5 million tonnes of ore each year.
Mine production: 850,000 MT
Jumping from ninth to seventh on the list of top copper producing countries, Russia’s copper production increased in 2020, up from 801,000 MT in 2019.
One of the biggest copper operations in Russia is the Udokan deposit in Siberia, which is currently owned by Udokan Copper (previously Baikal Mining Company). The deposit made headlines in 2018 when it was revealed that Baikal was looking to raise US$1.25 billion to develop a mining and metallurgical plant at the project. It is now under construction and expected to come online in early 2022.
Mine production: 830,000 MT
Copper production last year climed in Zambia, which is seventh in terms of copper production by country. Its 2020 rate of 830,000 MT was up from 2019’s production of 797,000 MT.
There are four major mines that dominate the country’s copper production. These include Barrick Gold’s (TSX:ABX,NYSE:GOLD) Lumwana, First Quantum Minerals’ (TSX:FM,OTC Pink:FQVLF) Kansanshi, Mopani Copper Mines (majority owned by Glencore) and Konkola Copper Mines, a subsidiary of Vedanta Resources (NYSE:VEDL).
The Zambian government recently announced it will take complete ownership of Mopani Copper Mines (in which it had a 10 percent stake).
Mine production: 690,000 MT
Coming in at ninth place is Mexico, whose copper production rate shimmied lower in 2020 to reach 690,000 MT from 2019’s total of 715,000 MT.
One of the biggest copper mines in Mexico is Grupo Mexico’s (BMV:GMEXICOB) Buenavista del Cobre operation in Sonora, by far the country’s largest copper producing state.
Mine production: 580,000 MT
Kazakhstan made incremental production growth when its copper output rose from 603,000 MT in 2018 to 700,000 MT in 2019. However, those gains were erased and then some when the nation’s copper production fell to 580,000 MT in 2020.
Kaz Minerals (LSE:KAZ) accounts for a large part of Kazakhstan’s metal production. The company is working on expanding Aktogay mine to double its processing capacity, which is expected to be completed by the end of 2021.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Metalstech encounters visible gold at Sturec drilling
The drill program on its fully owned Sturec gold project in Slovakia is now in full swing and although it is too early to expect assay results, Metalstech…
The drill program on its fully owned Sturec gold project in Slovakia is now in full swing and although it is too early to expect assay results, Metalstech (MTC.AX) already provided a quick interim update after the drill bit intersected visible gold in hole 17. This hole is an infill drill hole meant to follow up on hole 14 where Metalstech encountered 10 meters of almost 17 g/t gold within a broader interval of 43 meters of 4.88 g/t gold and 11.8 g/t silver.
Hole 17 is an underground drill hole, drilled from Drill Chamber 2, and the hole is located close to the pit outline used in the 2021 mineral resource update As you can see on the image above, the location of hole 17 is important as it will basically be able to validate the findings in hole 10, 13, 14 and perhaps even hole 5 which ended at the bottom of the pit outline.
We will obviously have to wait for the official assay results from the lab which could be expected in a few weeks.
Disclosure: The author currently has no position in Metalstech. Metalstech is a sponsor of the website. Please read our disclaimer.
How Evergrande the parent hurt Evergrande New Energy
One thing that has recently caught my eye has been the unravelling of China Evergrande Group – a conglomerate with over 100,000 employees spanning primarily…
One thing that has recently caught my eye has been the unravelling of China Evergrande Group – a conglomerate with over 100,000 employees spanning primarily real estate development but also new energy, property services and health amongst other industries.
Keen market observers would be aware of the Chinese government’s recent crackdown on various industries. Most headlines have been focused around the tech giants and the for-profit education sector, but has also involved online gaming companies (gaming restrictions), the steel industry (push for decarbonisation) and most recently Macau casinos. It has also maintained its tightening bias toward the property sector, which has further dampened the prospects for rebar steel, and by extension iron ore.
Property cycles are nothing new in China, with development and prices waxing and waning based on policy and availability of credit and partially responsible for cyclical price movements in iron ore. The most recent slowdown however seems to have hit the highly indebted Evergrande extremely hard, as unravelling confidence in its ability to repay its lenders (split between onshore and offshore) has sparked a sell-off in both its bonds (now trading at 30 cents on the dollar) while the company’s equity value, which peaked at a market capitalisation of over US$50 billionn and was as high as US$47 billion in June last year is now just US$4.4 billion.
One of the more interesting subplots has been the fate of its New Energy Vehicle group, a listed subsidiary in which the China Evergrande parent owns 65 per cent. Early in the Evergrande Saga, the Group proposed selling a stake in its new energy vehicles (NEV) subsidiary as one way to reduce its debt load. In January 2021, the group sold a ~11 per cent stake in the subsidiary to six investors, valuing the business at ~US$34 billion. Amazingly, this transaction – along with the hype surrounding the potential EV market in China and the company showcasing 6 new cars – triggered a furious rally which saw the share price rise 140 per cent in under 3 weeks, while its market cap peaked at US$85 billion despite not selling a single car (shades of Nikola in the US, albeit the NEV subsidiary also holds Evergrande’s legacy assets in the healthcare space and was formerly known as Evergrande Health Industry Group).
China Evergrande New Energy Market capitalisation
As concerns around its parent deepened, “investors” became concerned around the potential fate of its subsidiary with the Parent’s 6.35 billion NEV shares seen as a potential source of liquidity. This has seen a stunning collapse in Evergrande NEV’s market cap by ~US$80 billion since mid-April and has also caused liquidity issues in the NEV arm which just reported losses of more than US$742 million.
A good reminder to pay heed of any potential contagion and ripple effects, albeit most are hidden and only discovered after the fact (as well as the obvious lessons on the highs and lows of “investing” in pockets of extreme exuberance).
Inca One Gold: Gold Prepayment Facility Expected To Continue To Drive Results
When it comes to the gold market, presently, headwinds are rather less than exciting. With the metal currently unable to
The post Inca One Gold: Gold Prepayment…
When it comes to the gold market, presently, headwinds are rather less than exciting. With the metal currently unable to return to new high’s that were hit last summer, the sector has, understandably, been hit with the doldrums. But that’s not to say that good opportunities don’t exist within the space as it stands today.
One such example, would be Inca One Gold (TSXV: INCA). A metal processor based in Peru that is focused on working with artisanal miners, the firm has been hit with two negative tailwinds over the the last several months, despite neither of those tailwinds actually having an impact on the firm operationally. The first, the loss of interest in the gold market by investors, is well known across the sector, and has been felt by any operator touching the metal. The second, is the election cycle that saw a less than favourable candidate elected to helm the country.
In terms of these two headwinds, the first hardly has to be acknowledged at this point. Despite endless money printing globally, gold and silver are perhaps the two commodities that have stopped moving to the north, and instead have sputtered over the last several months. How long this continues is a gamble at best – but that isn’t to say that the present pricing is tough on producers by any stretch, with record or near-record revenues constantly being announced every quarter by operators.
The second, headwind, the election in Peru, is more specific to Inca One than other players in the global metals market. Earlier this year, the country elected Pedro Castillo as President, the seventh President in the last decade, and the fourth President in a matter of twelve months. He won with just 50.13% of the popular vote.
A left-winger, Castillo lists his careers as a schoolteacher, and union leader, along with being a politician. With political views so far left that he has had to emphasize that he is not communist, its fair to say that certain sectors in the country were reasonably worried about their future. However, on the topic of mining, he supports the industry “where nature and the population allow it,” however he desires to increasing taxation where possible. Effectively, he has come to the realization that the industry is a major driver in the country for employment.
Despite these two headwinds, the operations of Inca One appear to be thriving – the company has produced record results this year in terms of monthly production, with production set to only increase as a result of recent events.
The month of May for the company saw some of the strongest production figures in history for the company, with 3,538 tonnes of ore being processed, resulting in an average of 118 tonnes per day, and a total of 2,219 ounces of gold produced, with the latter being a 94% month over month increase.
Production in June faired even better, marking a new record for the company – 5,183 tonnes of ore processed, beating a prior record set in December 2019 of 5,177 tonnes. The average per day processing during the month meanwhile worked out to 173, more than double the 86 tonnes per day processed in March 2021.
The significant scaling of production is largely attributed to what the company refers to as a US$2.45 million gold prepayment facility, which it received in March. The facility effectively enabled the firm to acquire the working capital required to purchase the ore needed for processing, resulting in significant growth for the operation. While that loan was shorter-term in nature with repayment occurring this past summer, the notable aspect is that such a low figure was able to drive production in a meaningful way.
Fast forward a few months to August 2021, and the company has secured a much more meaningful gold prepayment facility – US$9.0 million – with much more favourable terms. The arrangement provides for up to $6.0 million in initial capital, which the firm can use to scale its operations immediately, through the purchase of further ore to be processed.
The company as a result has indicated that it intends to maintain production at a range between 175 to 225 tonnes per day, thereby providing consistency to its results, with the target of achieving profitability.
This level of production is significant. In the prior fiscal year, the firm averaged around 100 tonnes per day of production beginning in the second quarter. For the full year, the firm processed 31,656 tonnes of ore, which ultimately translated to revenues of US$30.1 million for the year ended April 30, 2021. The firm is well on the path to improving these figures for fiscal 2022, having produced 27.5% of this annual figure in just two months this year.
From a valuation perspective, things appear to be slightly “out-of-whack,” if you will. With a market capitalization of C$12.59 million as of Friday’s close, and 2021 revenues of C$38.8 million, the gold processor is trading at 0.32x topline revenues – an anomaly in a market so focused on stretched valuations based on topline results.
If history is any indication, the multiple on Inca One may become even more wild if the latest prepayment facility continues to deliver for the company.
Inca One Gold last traded at $0.34 on the TSX Venture.
FULL DISCLOSURE: Inca One Gold Corp is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Inca One Gold Corp on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
The post Inca One Gold: Gold Prepayment Facility Expected To Continue To Drive Results appeared first on the deep dive.gold silver commodities metals mining money printing tsx tsxv
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