Maravi

Copper prices hit record high

Copper prices hit record high
By Joan Chirwa
Monday March 10, 2008 [03:00]

LOW stocks of copper on the international market have seen the commodity hitting a record high as traders eyed US $10,000 per tone last Thursday. This is an attractive development for countries like Zambia whose new mining tax regime, which will see companies paying more for the mineral resource, is expected to come into effect at the beginning of next month.

The government has maintained its stance over the new taxes, with hopes of raising US $415 million (approximately K1.5 trillion) in additional revenue to the treasury in 2008.

Secretary to the Treasury Evans Chibiliti recently indicated that the government would be computing the new mining taxes based on the prevailing copper prices on the London Metal Exchange (LME) and other major markets and not individual transactions entered into by the mines and their sister operations outside Zambia.

Copper for delivery in three months was at US $8,720 per tone, down from an earlier record high of US $8,820 and US $8,785 at mid-session, according to Mineweb.

The metal, used extensively in construction, is still up by US $30 from its close of $8,690 on Thursday.

"Oil prices have come off quite a bit. People are taking some profits on the metals side," said Michael Jansen, an analyst at JP Morgan.

And some London Metal Exchange traders say copper prices could soon go US $10,000 per tone.

Copper stocks in LME-registered warehouses fell by 2,350 tonnes to 135,800, down by about a third since the start of the year and enough for less than three days of world consumption.

"In reality, there is not much spare metal around," head of resources John Meyer at Fairfax said in a report. "Copper prices are being pushed by investment demand but this is supported by ongoing demand growth for infrastructure development."

Labels: COPPER

posted by MrK @ 4:04 AM