COMMENT - I like the word extraction much more than production. The copper was already there. - MrK
(LUSAKA TIMES) First Quantum posts rise in Q2 copper output, braces for power cuts in Zambia
August 2, 2018
First Quantum Minerals saw an increase in copper output in the second quarter and is now bracing for a month-long power supply reduction at its Kansanshi and Sentinel copper mines in Zambia.
First Quantum Minerals CEO Clive Newall told analysts during a conference call on Tuesday that the company produced 150,950 mt of copper over April-June, up from 141,912 mt a year earlier.
Mr Newall said first half production totaled 296,308 mt, up from 274,268 mt in H1 2017.
“Our copper production exceeded last year’s comparable period as drier weather conditions in Zambia returned,” Mr. Newall said.
“While metal prices are being negatively affected by global political concerns, demand for copper remains robust. We continue to sell all of our production into a market where there is excess demand.”
Mr. Newall said his company has been advised by ZESCO that electricity to First Quantum’s Kansanshi and Sentinel mines will be reduced from around end July to facilitate maintenance and upgrades to the electricity network.
However, the power cuts are expected to be “only marginally below what we need to run optimally,” he said.
“It’s not going to have a material impact on our guidance going forward and we’re doing what we can to make the most of the power that is available,” he added.
Labels: CLIVE NEWALL, COPPER, FQM
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(GUARDIAN UK) Zambian villagers take mining giant Vedanta to court in UK over toxic leaks
Fears of environmental catastrophe as report finds ‘constant contamination’ of streams around copper mine while locals report health problems and failed crops
Shimulala village borehole
Saturday 1 August 2015 22.35 BST
Last modified on Sunday 2 August 2015 00.30 BST
A London-listed mining giant has been polluting the drinking water of villages in Zambia and threatening a wider health disaster, the Observer has found.
Leaked documents and a confidential internal report commissioned from Canadian pollution control experts show that Vedanta Resources’ giant mine in Zambia’s Copperbelt region has been spilling sulphuric acid and other toxic chemicals into rivers, streams and underground aquifers used for drinking water near the mining town of Chingola.
‘I drank the water and ate the fish. We all did. The acid has damaged me permanently’
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The result, say people in four villages living near the giant 12 sq mile mine owned by Vedanta subsidiary KCM, is stomach pains and illnesses, devastated crops, loss of earnings and permanent injuries. The claims of villagers living near one of the largest copper mines in Africa are backed by a leaked letter from a KCM doctor stating that water collected for testing from Shimulala village in 2011 was unfit for human consumption. “The water is acidic and the copper and iron levels exceed permitted levels,” the doctor wrote. “The impurities … can cause cancer in the bloodstream and unhealthy conditions in internal organs. The people in that village should be advised to stop using the same water.”
London law firm Leigh Day has issued proceedings in the high court in London on behalf of 1,800 people who claim to have been affected by the company’s pollution. “The case could take three years to resolve,” said Leigh Day senior partner Martyn Day, recently returned from Zambia, where lawyers and paralegals have been taking witness statements from people living near the rivers and the company’s operations.
Lawyers Leigh Day: troublemakers who are a thorn in the side of multinationals
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A Vedanta spokesman said: “All Vedanta’s operating subsidiaries take the health of their employees, the wellbeing of surrounding communities and the environment very seriously. Our subsidiaries are committed to ensuring they operate in a safe and sustainable way.”
But a scientist who worked for more than 15 years with KCM said there has been little maintenance of critical equipment since Vedanta bought the mine, despite production of some 10,000 tonnes of copper and 300 tonnes of cobalt a year. He accused Vedanta of releasing more acid than it has authority for. “There have been heavy spillages and massive leakages. Acid has been leaking all over the place. The pollution control pond is handling too much material. No effort has been made to correct this scenario. Only one of four [waste] pipelines is running – the rest are in disrepair.
“Degraded equipment, leaking pumps, pipes, thickeners and settling ponds have [resulted in] excessive spillages. Water overflowing into the Mushushima river and subsequently the Kafue river poses a possible environmental catastrophe downstream,” he said.
“The company has very good plans on paper that have not materialised on the ground for the last 10 years. It is absolutely clear that there is a massive problem. Because the river Kafue feeds into the Zambezi river, which provides drinking water for much of Zambia, the pollution could affect hundreds of thousands of people downstream, he said. “A disaster is very likely. It has the potential of affecting people hundreds of miles away. Water supplies could be damaged and aquatic life would die.”
A leaked report by the Canadian engineering company SNC-Lavalin, which in 2010 was employed to advise Vedanta/ KCM on how to control continuing pollution, says that solids, dissolved copper and acids are being spilled. It refers to “constant contamination” of streams, and says the main pollution control dam is often full to capacity. It adds that reservoirs overflow and there are leakages from pipes and a lack of spare parts. The engineers’ report calls for 17 major and minor actions to stop the spillage of polluted water into the environment.
Labels: COPPER, KCM, POLLUTION, VEDANTA
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(STICKY) (ZAMBIAN-ECONOMIST) Copper Colonialism
Foil Vedanta have today released a report (embedded below) on the operations of Konkola Copper Mines (KCM) in Zambia. The report reveals that, contrary to popular opinion in Zambia, Vedanta (KCM's parent company) is not Indian but wholly British owned and controlled, and is making large profits at KCM. The report demonstrates Vedanta's pattern of buying undervalued state companies, polluting, and operating without permission all over the world. It also reveals how investment companies like Blackrock have controlling interests in Zambian copper as key shareholders behind Zambia's biggest mining companies.
Foil Vedanta's(1) report 'Copper Colonialism – Vedanta KCM and the copper loot of Zambia'is a groundbreaking study of copper mining in Zambia, focusing on British mining company Vedanta, KCM's parent company. The report reveals that Vedanta made approximately $362 million, or 12.9% of their total group revenue, from KCM in 2013 (according to the company itself and analyst reports)(2). The authors, who visited Zambia in December, note the number of misconceptions about this company in Zambia – where Vedanta has created the perception that they are an Indian company, and are making such a loss at KCM that they may need to be rescued by the state. In fact KCM are one of the highest profit making subsidiaries of the parent company.
The report details how Vedanta, a FTSE 250 London based company which is 67.99% owned by Chairman Anil Agarwal via tax havens, bought KCM for a fraction of its true value, possibly losing the Zambian exchequer up to $1.4bn in total.(3) It goes on to record some of the environmental and social abuses of the company in Zambia – including pollution of the river Kafue in 2006 and 2010 which have led to ongoing health problems as extreme as deformed births and miscarriages in the Chingola area, as well as poor workers conditions and low pay. Vedanta's tax contributions in Zambia are close to zero, and they even brag that 50% of tax paid is via employees Pay As You Earn (PAYE). Vedanta hide these truths in Zambia by paying former journalists as PR agents to keep their image clean.
The authors demonstrate that this style of operation is a pattern for Vedanta across India and elsewhere, where they are consistently opposed by people's movements and under investigation by authorities for corruption and legal violations. In Chhattisgarh, India, they bought BALCO's bauxite refinery, smelter and mines for $89 million in 2001 when it was worth around $800 million. Vedanta Chairman Anil Agarwal is currently under investigation by the Central Bureau of Investigations in India over the original disinvestment of 51% of Hindustan Zinc Ltd (HZL) to Vedanta for only $72 million, claiming the deal was considerably undervalued, and may have lost the exchequer hundreds of millions of dollars in revenue.
Vedanta's subsidiary Sesa Goa are accused of exporting 150 million tonnes of iron ore from Goa, India in 2010/11 while only declaring 7.6 million, their agreed export allowance. The report suggests that Vedanta may also be exporting considerably more copper than they claim in Zambia, as well as cobalt and other minerals, and recommends citizens monitoring of trucks leaving their facilities to estimate the true amounts.
The report also looks at the real interests behind mining companies in Zambia. Using shareholder information it shows that secretive investment company Blackrock have high percentages of shares in Vedanta, Glencore and First Quantum, Zambia's three biggest miners. Blackrock and JP Morgan are currently buying the majority of the worlds available copper to launch a futures market which will control the price of copper, giving them high returns on their investments while leaving copper producing nations in poverty.(4) The report also draws attention to foreign governments such as Norway and the UK, who play a duplicitous game of funding transparency and accountability projects on mining via NGOs and the Zambian government, while also profiting from the abuses of the very same mining companies.(5)
Author Samarendra Das says, "We were shocked to discover how little information Zambian authorities and communities have about their own resource and the companies exploiting it. Despite its role in the economy, copper is the elephant in the room in Zambia. This report aims to expose the real interests controlling Zambia's copper industry - from banks and investment firms to foreign governments and NGOs."
Co-author Miriam Rose states, "Mining companies are commonly called 'investors' in Zambia, but what they are doing is far from investment, it is short lived extraction and loot of resources, leaving behind only environmental and social damage which will be paid for by future generations. There is limited time left for Zambians to change the course of history, make links with peoples' movements opposing these policies elsewhere, and truly profit from this resource before it is all gone."
Notes :
1.
Foil Vedanta are a London based international solidarity group focusing on the activities of British mining company Vedanta. We link up global communities affected by Vedanta, and hold them to account in London. We are currently aiming to make the case for Vedanta to be de-listed from the London Stock Exchange for their human rights and corporate governance abuses.
2.
Excerpt from report (p.12):
KCM and other mining companies in Zambia don't publish their profits, even though the Zambian taxpayer has a share in most of them via ZCCM-IH. However Vedanta's 2013 annual report claims KCM produced 216,000 tonnes of copper in 2013. In the same year costs of production were valued at 255.1 US cents/lb, putting the total cost of production that year at $1.2 billion, which would constitute a profit of $362 million (at a current copper price of $7,300). Analysts reports from Global Data reveal that KCM made 12.19% of revenue for the entire Vedanta group in 2012 so they are certainly not doing too badly.
3.
Excerpt from report (p.6):
A 51% share in KCM was sold to Vedanta Resources for just $25 million, paid in cash, and $23million in deferred payments, in 200412. The deal was facilitated by Clifford Chance and Standard Chartered Bank13 (one of the main bookrunners and lenders to Vedanta Resources). Within three months Vedanta had already recouperated its initial investment, making $26 million. The banks also helped Vedanta secretly negotiate a call option allowing them the right to purchase Zambia Copper Investments' 28.4% share14, which they exercised in November 2005 (a year after their initial purchase), giving them the 79.4% monopoly they currently hold on KCM, while the Zambian government - via ZCCM-IH (their mining investment wing), own the remaining 20.6%. The Competition Commission was even rendered irrelevant by the Zambian government to allow Vedanta such a large majority share.
The price negotiated for the buyout of ZCI's remaining shares is not reported, but analysts at the time valued it between $250 million and $550 million, putting Vedanta's original 51% share at between $455 and $910 million, nine to eighteen times what Vedanta paid! This means the Zambian exchequer lost between $155 and $340 million in from the sale of 21.4% of ZCCMIH's shares alone. In response, ZCI's 33% French shareholders (grouped into a company called Sicovam SA) called the deal 'the most outrageous and scandalous ever seen in Africa for decades'.
This puts the value of the entire 79.4% share held by Vedanta at between $705 and $1460 million, losing the Zambian exchequer between $600 and $1400 million in undervalued assets.
4.
Excerpt from report (p.26):
Blackrock is the world's biggest asset management company, in charge of $4.1 trillion of assets (including much of Zambia's copper via its shares). It is bigger than any bank, insurance company or government fund, and is the majority shareholder in half of the world's 30 largest companies. It was set up by Larry Fink - a Washington insider who was named as a potential treasury secretary in the US. Blackrock, JP Morgan and Goldman Sachs are currently working together in an attempt to buy up 80% of available copper on behalf of investors, and hold it in warehouses. This will create a copper futures market enabling speculation, futures trading, and backing of new loans and funds.
In 2010 JP Morgan bought more than half of the available warehoused copper in a few weeks, leading to a spike in copper prices. Manufacturers and copper wholesalers warned the Securities and Exchange Commission (SEC) that such a monopoly on copper would squeeze the market and send prices skyrocketing but under pressure from Blackrock and the banks the SEC approved their proposal.1 The aluminium futures market set up by Goldman Sachs, on which the copper takeover is modelled, is estimated to have cost consumers billions of dollars in price hikes, as market manipulations sent prices soaring.2
(5) See section on NGOs and civil society, p.30 of report.
1 The New York Times, July 21st 2013, 'Next up Copper.'
2 David Kocieniewski, New York Times, July 20, 2013. 'The House Edge: A Shuffle of Aluminum, but to Banks, Pure Gold'
Labels: BLACKROCK, COPPER, TAX EVASION, VEDANTA
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Govt anticipates rise in copper production
By Chiwoyu Sinyangwe
Mon 30 Sep. 2013, 14:00 CAT
COPPER production in Zambia is this year expected to increase by at least 31,000 metric tonnes from last year as renewed investor confidence blossoms, says mines permanent secretary Dr Victor Mutambo.
Zambia produced 819,000 metric tonnes of copper in 2012 and preliminary indications are that 850,000 metric tonnes of the metal which accounts for 78 per cent of the country's foreign exchange receipts would be mined this year.
"Following the change of government in late 2011, there were some sections of society around who thought that Zambia was probably going to nationalise the mines," Dr Mutambo said in an interview.
"So, if in 2012, we had about 819,000 metric tonnes, then we will be above 850,000 metric tonnes. We know that some mines like Kansanshi mines have stepped up production, Lubambe mines has come on stream and also the Muliashi Mine in Luanshya. From where we stand, we have seen a resurgence of mining activities in the country."
He said the focus of the ministry in the last two years had been to reform the issuance of licences for mining rights to eliminate bureaucracy and improve transparency levels.
"If you go to the cadastre system, there are no lines that side anymore," Dr Mutambo said. "We found a backlog of mining rights applications which was not properly explained...and we have even gone further by fully computerising operations so that within a short period of time, we can go online. And because of that, within this shortest possible time, we have even attracted mining giants like Anglo American Corporation, who have come back. Vale are also prospecting for mining rights as well as Rio Tinto. So, when you see these big mining companies coming back, in essence, they become our ambassadors outside because the investor worldwide realises that in fact, things have become better."
He said the government would continue to pursue transparency in the mining sector as it sought to increase participation of Zambians in the vast mining sector.
"Any company that is doing right business, there is nothing to hide. If you have got a loan and if it was obtained from a mother company based in another company, you should be able to say this loan I got it from a mother company," Dr Mutambo said.
"And this is what that SI 55 has achieved because it means the companies would not have to get fake loans. Most of these mining companies are listed on the stock exchange and the rules are the same, they have to be transparent. So, there is nothing that government has done which is against the international norms."
And Dr Mutambo said the government last month replaced the 1995 mining policy to address the imbalance which had resulted in low participation of Zambians in the country's lifeblood.
"The Minerals Resources Development Policy of 2013 is going to emphasise the rejuvenation of the small-scale mining sector," said Dr Mutambo.
"Zambians should be empowered to own these mines whether at small-scale level or large-scale. Participation could be by way of ownership or by way of having shares in the new mines. We want to continue creating the same conducive environment and putting the same emphasis that the mining sector will continue to be private sector-driven."
The 1995 mining policy came into being as a result of the government's intention to transform the mining sector into a private sector-led industry.
Labels: COPPER, MINING
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Copper prices at LME hurting local sector - Ground Focus
By Misheck Wangwe in Kitwe
Wed 07 Aug. 2013, 14:00 CAT
GROUND Focus Mining says the fluctuating copper prices at the London Metal exchange (LME) have negatively affected copper oxide production by local mining firms.
And the government says it is making serious efforts to find ways of protecting local mining firms in copper oxide production as the industry has potential to create jobs and contribute to economic stability.
In an interview yesterday, company managing director Jimmy Mubashi said Ground Focus, which is one of the major local mining firms in copper oxide production, would only record an average performance by the close of its financial year due to the low demand from the Chinese buyers that were holding on to investment following unstable copper prices at the LME.
He said it would be difficult for the mining firm to reach its target of 4,500 metric tonnes output of copper oxide but it would record slightly above 2,500 which would be an average performance.
Mubashi said the government had a mammoth task of protecting local investment by ensuring that foreign investors, buyers of copper oxide and low grade are not allowed to exploit local mines by dictating the price of the minerals produced locally.
"A lot needs to be done for local mining companies to survive, make profit and create more employment. We have seen a drastic fall in oxide production and on the other hand, the recovery rate has drastically dropped from the normal US$45 per tonne to US$15 dollar per tonne," Mubashi said.
"These are serious issues that need adequate attention because the industry still looks vulnerable and requires protection from the government through a policy directive. This is possible because the investors in copper oxide dictate the price but it should be the government to set a standard while monitoring the performance at the London Metal Exchange."
He further said if the government allowed local mining companies to put up processing plants for copper oxide, it would be easy for such firms to stabilise, fix prices and compete favourably with transnational mining companies.
Mines deputy minister Richard Musukwa recently said the drastic fall in copper oxide production among local mining companies on the Copperbelt from 20 per cent to as low as six per cent was mainlydue to lack of a stable market.
Musukwa said everything possible was being done to avert any possible crisis in terms of copper oxide production among local mining companies.
He said the government was mindful of the fact that the economy could only thrive if local mine investors and entrepreneurs were protected so that they could enhance production.
Musukwa said the government was strongly convinced that local mines had potential to change the face of the mining industry.
http://www.postzambia.com/post-read_article.php?articleId=36435
MMD, MICHAEL SATA, CHIEFS, CHIEF HANJALIKA, WYNTER KABIMBA,
MMD harassed traditional leaders for 20 years - Sata
By Roy Habaalu in Mazabuka
Wed 07 Aug. 2013, 14:01 CAT
PRESIDENT Michael Sata says the MMD humiliated and harassed traditional rulers for 20 years.
During the Lwiindi-Mulembo traditional ceremony of the Tonga-speaking people of chief Hanjalika in Magoye and celebration of 100 years of existence of the tradition, President Sata, represented by justice minister Wynter Kabimba, said the MMD's humiliation of chiefs caused instability in chiefdoms.
"In the last 20 years of the MMD under the guise of democracy, our traditional leaders were harassed, humiliated by their own citizens, causing instability and undermining the authority of traditional leadership. In PF, we believe that there can be no development without chiefs, and we are not going to use chiefs as pawns in our politics. Instead, we shall work with them as partners," President Sata said.
"It's scandalous that 49 years after independence, you have a bad road leading to a chief's palace; it's scandalous that after 49 years, our people have no water to drink; it's scandalous that after 49 years, our citizens are dying of preventable diseases because clinics are far. It's scandalous that 49 years after independence, children can't get enrolled in schools because there are not enough schools," he said.
President Sata said the government would embrace everyone willing to contribute to national development.
He said he was glad that Magoye UPND member of parliament Oliver Mulomba had admitted publicly that the government responded well when he requested for assistance.
President Sata said development was for everyone regardless of political affiliation or tribe.
He said he would work with traditional leaders as partners in development.
"Don't support us for the sake of it. Only support us when we do something for our people, not because we want to remain in power. We are not suffering from the disease of self-preservation. We know we shall not be there tomorrow; even the world will come to an end in the future. Our duty as PF is to ensure that we do the best for all while we are governing this country and this is what will make us remain in power for long," President Sata said.
He said the PF would not betray the aspirations of its people or work against them. Meanwhile, President Sata said district commissioners were superior to council secretaries. President Sata said if district commissioners experienced difficulties in the course of their duty, they should report to the administration.
"I want to make this very clear that district commissioners are appointed by His Excellency the President, and between district commissioners and council secretaries, DCs are senior. So this friction should end. If DCs find a council secretary resisting, report to the administration. We have no time for friction; we have time for development. We lost 20 years of development under the MMD and that loss can only be recovered if we work together and rally behind one President and party, and that party is PF," President Sata said.
Earlier, Kabimba refused to use the dais because it was unAfrican to turn one's back on chiefs.
"I will stand here. I will not use that (the dais) because that's disrespectful for me to turn my back at their royal highnesses, so next time put it in the right position," Kabimba said.
And Kabimba said the proposed law to stop chiefs from being dragged to court was not meant to grant them immunity from prosecution.
Labels: COPPER, GROUND FOCUS MINING
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Fall in copper prices to impact Zambia - KCM
By Chiwoyu Sinyangwe
Thu 18 July 2013, 14:00 CAT
KONKOLA Copper Mines says the country needs to start preparing for the reality that current continued fall in international copper price will negatively affect Zambia including reduced revenues for the Treasury.
Director for strategy and business development Brad Gnanasivan, however, said the local mining sector is currently in a better position to deal with low international copper prices than they did during the economic crisis of 2009.
Gnanasivan said the continued "worrying" fall and "uncertainty" in international copper prices will see mining firms focus on reducing production costs.
"There are some degrees of uncertainty with where the Chinese economic growth is going," Gnanasivan told journalists during a KCM-sponsored media workshop in Lusaka yesterday.
"And if the Chinese demand continue to trend downwards as the case in the last two quarters, then the demand for copper will reduce and that means prices might trend downwards a little further. So, it's a reality we all have to live with and have to prepare for."
Gnanasivan said there was need for a positive environment in the country to mitigate the likely negative effects of price fall on the operations of mining companies.
He was, however, pessimistic the current fall in metal prices would hurt the mining sector in a manner that mirrors the crisis of 2008 when copper prices dipped below US$2,800 per metric tonne resulting in mining firms shutting down many operations and laying off workers in the process.
"The good thing is that we have been there before periods of low copper prices. It's not something that is new to us," he said.
"Only that we all have to understand what that will be in terms availability of foreign exchange earnings and that might translate into less tax revenues for the country."
Gnanasivan said with the current copper price averaging US$7,250 per metric tonne and indications of further declining, KCM would continue exploring way of reducing its operation costs.
Gnanasivan said the price of above US$7,500 per metric would enabled KCM to operate sustainably as it was a high production cost mine.
"It's very worrisome that if copper prices continue to go further down, then we have to end up to take some measures to address the reduction in prices because what decisions you make when copper prices are sustainably above US $7, 500 to US $8, 000 per metric tonne is not what you do when its below US $7,000 per metric tonne," said Gnanasivan.
Last June, KCM was forced, by the government, to shelve plans to lay off 2,000 of its almost 20,000 workers amidst rising operation costs and declining international copper prices.
Labels: BRAD GNANASIVAN, COPPER, KCM
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KCM, govt seek best policies on value addition to copper
By Misheck Wangwe in Kitwe
Sat 22 June 2013, 14:00 CAT
KONKOLA Copper Mines says it is working with the government to find best ways of formulating policies that will determine value addition to copper.
According to a news release, company chief executive officer Jeyakumar Janakaraj said the mining company was working in collaboration with the Zambia Development Agency (ZDA) and the Ministry of Commerce, Trade and Industry was pioneering a renaissance in value-addition to the red-orange metallic metal, which was used principally as a durable, corrosion-resistant, and weatherproof architectural material in the construction industry.
He said the joint KCM-government initiative was exploring the introduction of a specific policy strategy that would insulate new firms from foreign exchange fluctuations and other global and domestic market forces, as well as exposure to start-up capital.
Janakaraj said the Private-Public-Partnership (PPP) plan to create a model Copper Park, a location for the manufacture of copper products like geyser elements, roofs, electronics, vaults, busbar and doors was expected to broaden the usage of the metal so as to keep abreast of the diversification of the country's economy.
He said in its capacity as a private-sector promoter of using copper in local beneficiation, KCM plans to be one of major suppliers of large volumes of copper to local industry.
"In fact we are already doing value-addition because we go beyond the production of copper concentrate to produce fully refined copper with a grade of plus 99.99 percent," Janakaraj said.
"A significant portion of the value addition to copper occurs at this stage. We do not export copper blister, which is an intermediate product."
He said the company was also exploring ideas to provide technical support to ensure that the project takes off on the model of its sister company, Sterlite Industries India Limited.
Janakaraj said Sterlite Industries of India currently sells around 60 to 65 per cent of its copper rod and copper cathodes to the domestic manufacturing industry and the balance was exported.
He said India's auxiliary industry using copper to produce winding wires, cables, alloy, transformers and other products was thriving on the supply, adding that when replicated, the model would enhance economic growth and create more jobs.
"The current fiscal and commercial policies don't support this, but KCM is already engaged with the government to help to formulate policies that will determine that value-addition chain because the industry is capital-intensive," Janakaraj said.
Analysts say these plans also augur well for promoting small-scale industry dealing in the manufacture of decorative art, which prominently feature copper.
The metal's high thermal and electrical conductivity could spur local production of larger quantities of cables for wiring.
Janakaraj said as a starting point, existing copper value-adding ventures within Zambia such as the manufacturing of cables should be supported fully.
And economic consultant Professor Oliver Saasa said although the country was currently a net exporter of copper cathode, little value-addition was going into the product at the moment.
Prof Saasa said as the country attains higher annual production, there was need to use copper to diversify the economy.
Labels: BENEFICIATION, COPPER, JEYAKUMAR JANAKARAJ, KCM
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FQM targets 4th largest copper producer slot
By David Chongo in Solwezi
Mon 27 May 2013, 14:00 CAT
FIRST Quantum Minerals is targeting to become the fourth largest copper producer in the world by 2018 with new acquisitions and expansion projects at existing operations, which includes three sites in Zambia.
The mining group, which owns the country's flagship copper mine, Kansanshi Mining Plc in Solwezi, would leapfrog industry giants like BHP Billiton, Anglo-American, Rio Tinto and Vale into fourth position behind leaders Freeport-McMoRan, Glencore Xstrata and Codelco.
Kansanshi Mining Plc acting general manager Alan Delaney says First Quantum Minerals (FQM) has increased its operations and project portfolio to be a global player with a presence in eight European, African, South American countries including Australia.
"Beyond that, First Quantum has diversified globally and now has a presence in Europe (Turkey, Spain and Finland), Australia, South and Central America as well as West Africa," he said. "The acquisition of Inmet Mining and its operating mines and projects, as well as FQM's expansions and new projects within Zambia will make us the fourth largest copper miner in the World by 2018 at current production levels."
Kansanshi Mining, according to Delaney, will play a key role in the process by doubling its production to between 350,000 and 400,000 tonnes of copper per year through expansion of oxide treatment plant and the construction of a new sulphide concentrator plant.
Kansanshi Mining, jointly owned with ZCCM-IH, will also commission a new 1.2 million tonnes smelter by mid next year which will also treat concentrate from the parent company's operations at Sentinel and Enterprise which form the Trident Project that includes Intrepid, west of Solwezi.
Labels: ALAN DELANEY, COPPER, FQM, KANSANSHI MINING PLC
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(REUTERS) Glencore clinches Chinese approval with copper deal
By Clara Ferreira-Marques
LONDON | Tue Apr 16, 2013 9:23am EDT
LONDON (Reuters) - China's antitrust authorities removed the last obstacle to Glencore's $30 billion takeover of miner Xstrata on Tuesday after the commodities trader agreed to sell a $5.2 billion mining project to ease its grip on copper.
Xstrata's Las Bambas mine in Peru had been expected to be sacrificed to secure the approval of China's Ministry of Commerce, but Glencore also agreed 8-year commitments covering the supply of copper, zinc and lead to China.
Chinese regulators have rarely demanded asset sales to improve competition after a major tie-up, but the importance of the metals that Glencore mines and trades for China's economy meant the merger was unlikely to go through without changes.
In particular, Glencore had already signaled that Chinese authorities were focused on its hold on the copper market, and specifically copper concentrate. Glencore and Xstrata combined account for roughly 7 percent of global copper supply.
Glencore, which is now on track to complete the industry's biggest ever deal in two weeks, has to begin the process of selling Las Bambas within three months, and find a buyer by the end of August 2014.
If it does not find a buyer for the asset - a major mine expected to produce an annual 400,000 metric tons of copper for at least four years from 2015 - it will have to find alternatives.
Glencore, which has made no secret of its desire to slash the number of Xstrata mines being built from scratch, will have three months to offer up one of the miner's longer-dated projects instead - namely Tampakan in Peru, Frieda River in Papua New Guinea, El Pachon or Alumbrera in Argentina.
"Them being willing to sell Las Bambas shows there are no sacred cows in the eyes of the Glencore management. It shows they think a little differently - they've always shied away from greenfield projects," analyst Jeff Largey at Nomura said.
"If they can pull value forwards on Las Bambas by selling it - rather than taking on all the operational and execution risk associated with building it (and) bringing it to production - I think the market will reward them."
Satisfying China's appetite for concentrate, an intermediate product that feeds refineries and smelters, Glencore agreed to supply a minimum of 900,000 tonnes of copper to Chinese clients a year for 8 years from 2013. The price for at least 200,000 tonnes will be priced in accordance with the benchmark level.
Glencore also agreed to supply zinc and lead concentrate on "fair and reasonable" terms.
XSTRATA DEPARTURES
China's green light on Tuesday paved the way for Glencore to tie up at last its long-desired acquisition of Xstrata by next month - 15 months after it was first announced.
But separate news on Tuesday of a stream of departures from Xstrata's management team highlighted the challenges during what will be Glencore's biggest integration to date.
Xstrata announced chief executive Mick Davis would not take up the role of at the combined group for six months, as initially agreed. It also announced the departure of divisional heads including copper boss Charlie Sartain and nickel chief Ian Pearce, along with Thras Moraitis, Xstrata's head of strategy and a close associate of Davis.
"This clearly turned into a takeover rather than a merger. We all knew (Glencore chief executive) Ivan Glasenberg was going to be the top dog, it was just a matter of time," Nomura's Largey said.
Glencore has already cleared regulatory hurdles including the European Union, which instead of copper focused on the group's concentration in zinc.
Glencore had agreed to scrap a European zinc sales with producer Nyrstar, and said on Tuesday it had struck a deal and a termination fee. Nyrstar will buy out Glencore's almost 8 percent equity stake for 3.39 euros a share - below the current price - for a total of 44.9 million euros.
($1 = 0.6531 British pounds)
(Additional reporting by Stephen Eisenhammer and Jane Barrett in London, Michael Martina and Shao Xiaoyi in Beijing; editing by Jonathan Standing and David Stamp)
Labels: CHINA, COPPER, GLENCORE INTERNATIONAL AG
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(STICKY) Contradiction between rich mineral resources and poverty
By Editor
Tue 02 Apr. 2013, 14:01 CAT
Dr Claud Kabemba, the director of Southern African Resource Watch, says the poverty situation in Zambia amid rich mineral resources is a serious contradiction that must be addressed without further hesitation. We agree.
Why should people be poor in a country that is rich, in a country that is earning gigantic sums of money from the exploitation of its mineral wealth?
Clearly, poverty is the impoverishment caused by the unjust political, economic and social structures. And because of this, the poor deserve preferential attention.
The reality described by Dr Kabemba shows us with ever greater clarity that our nation must undergo structural transformation. This situation calls for greater participation by the people in national decision making.
This option, demanded by the scandalous reality of economic contradictions and imbalances in our country, should lead us to establish a dignified, fraternal way of life together as human beings and to construct a more just, fair and humane society.
The required change in unjust social, political and economic structures will not be authentic and complete if it is not accompanied by a change in our personal and collective outlook regarding the idea of a dignified, happy human life. This in turn disposes us to undergo conversion.
Committed to the poor, we must condemn the extreme poverty that affects an extremely large segment of the population of our country. We must make every effort to understand and denounce the mechanisms that generate this poverty. We should combine efforts with those of people of goodwill, wherever they may be or whatever their outlook, in order to uproot poverty and create a more just and fraternal nation.
There has been mining of minerals in our country for close to a hundred years now, if not over. But very little has been achieved in addressing poverty. The arguments of those who have made gigantic profits from the minerals of this country have remained the same all the time - increasing costs of mining, fluctuating or declining mineral prices. They have benefited disproportionately from the mineral resource of this country.
Every time the people demand a bigger share of the benefits of mining, technical arguments are advanced to deny them their fair share. All sorts of intellectuals and other experts are mobilised by the mining corporations to justify their positions. Even government officials and politicians are mobilised to ensure that the mining corporations keep their lion's share of the benefits of mining.
But whatever affects the dignity of individuals and peoples cannot be reduced to a "technical" issue. If reduced in this way, poverty will continue to deepen in our country because development would be emptied of its true content. And this would be an act of betrayal of the people whom the mining of the mineral wealth of our country is meant to serve.
This is why we should have something to say today, just as we did twenty years ago, and also in the future, about the nature, conditions, requirements and aims of mining in our country, and also about the obstacles which stand in the way of our people benefiting reasonably from the exploitation of their country's minerals.
In today's difficult situation, a more exact awareness about the realities of mining in our country would be of great help in making everyone understand the situation and find the best solution to it.
Our daily life as well as our decisions in the political and economic fields must be marked by these realities. Likewise, our politicians and other leaders while they are obliged always to keep in mind the true human dimension as a priority in their economic and financial plans, should not forget to give precedence to the phenomenon of growing poverty. Unfortunately, instead of becoming fewer, the poor are becoming more numerous in our country.
It is necessary to state once more the characteristic of fairness and justice: the mineral wealth of this country was originally meant for the benefit of all. The right of those who mine our minerals to make a profit and appropriate it is valid and necessary, but it does not nullify the value of this principle. Mining in this country as it is elsewhere, the exploitation of our natural resources should be under a 'social mortgage', which means that it has an intrinsically social function based upon and justified precisely by the principle of the benefits accruing to all who hold an interest in the minerals being mined. Likewise, in this concern for the poor, one must not overlook that special form of poverty which consists in being deprived of the benefits from the minerals under one's own land.
The issues being raised by Dr Kabemba and the motivating concerns about poverty must be translated into concrete actions, until they decisively attain a series of necessary changes or reforms in the way the benefits from mining are shared.
It is also important to remember the fact that development cannot be limited to mere economic growth. In order for it to be authentic, it must be complete: integral, that is, it has to promote the common good of every man and woman and of the whole man and woman. As an eminent specialist has very rightly and emphatically declared:
"We do not believe in separating the economic from the human, nor development from the civilisations in which it exists. What we hold important is man, each man and each group of men, and we even include the whole of humanity."
We shouldn't also forget that poverty denotes an extreme form of deprivation of needs and capabilities that are deemed to be basic to survival and wellbeing. The need then for pro-poor policies and their effective implementation demands that all national and international stakeholders, all government and all corporate representatives dialogue and work together to address our high national poverty levels and give additional attention to those who face special challenges in meeting basic needs.
When it comes to mining, we should also bear in mind that economies across the world depend on resources collected from taxes to finance government activities. No government can be sustained without mechanisms for generating adequate domestic revenue. Taxes, especially from mining operations, should therefore be a major way for us to raise revenues to meet the social and development needs of our people. Taxes, especially from mining, will greatly help in reducing poverty in our country. Fair taxation of mining operations will be for the common good. We are reminded in Romans 13:2: "Give everyone what you owe them: if you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour."
Labels: CLAUD KABEMBA, COPPER, NEOCOLONIALISM
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Zambia to produce 1 million tonnes of copper by 2015
By Henry Sinyangwe
Tue 02 Apr. 2013, 14:00 CAT
MINES permanent secretary Victor Mutambo says Zambia would produce up to 1 million tonnes of copper by 2015 up from 750,000 tonnes produced last year. He said the country's mining industry was growing at a fast rate considering increased expansion by mining companies.
"There has been tremendous performance from the mining sector. We have seen huge investments in the sector and a lot of expansion projects have been ongoing with Konkola, Mopani and Kasanshi mines… and equally production is also currently rising steadily," Dr Mutambo said.
"For example, last year, we were talking between 715,000-750,000 tonnes of copper produced, we are thinking going into 2014, 2015, Zambia should be reaching 1 million tonnes of copper."
He said government was also trying to put up a mechanism so that it was able to know the value of the metals being exported.
Dr Mutambo said if one was mining in the country and they were earning foreign exchange, it was in order that part of that is ploughed back into the Zambian economy.
He said government was trying to ensure that the country got a better share from the proceeds in the mining sector as opposed to having all the money outside the country.
"Zambia will continue to be a favourable destination in terms of investment. And what the government is trying to do is to make sure that as much as we encourage investment, we also try to get a fair value of it and we can only do that by stepping up the monitoring mechanism in terms of what is being produced, how much is being exported and also how much we are getting from whatever we are exporting which is a cardinal issue," said Dr Mutambo in an interview.
Labels: COPPER, VICTOR MUTAMBO
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Police detain 4 for transporting copper using fake documents
By Ndinawe Simpelwe
Wed 07 Nov. 2012, 16:40 CAT
CENTRAL Province police commissioner Joyce Kasosa has been transferred to Lusaka Province in the same capacity to take over from newly promoted Deputy Inspector General of Police Dr Solomon Jere.
And four people have been detained, among them a foreign national, for transporting copper without proper documents. Police public relations officer Elizabeth Kanjela stated that Muchinga Province police commissioner Standwell Lungu will take over from Kasosa in Central Province.
President Sata recently appointed Dr Jere as Deputy Inspector General of police to assist Inspector General Stella Libongani.
Meanwhile, Kanjela stated that police in Lusaka are looking for a maid only known as Elina for robbery.
Kanjela stated that the incident happened on November 5 in Kamwala's Madras area.
She stated that Elina attacked her boss identified as Sashikala Sunaram Grilam aged 40 years with a cricket butt and ran away with K5 million and a passport belonging to the victim's relative.
The victim who sustained head injuries and a cut on the middle finger has been admitted to Coptic Hospital.
In Kabwe, one person died on the spot while 13 others sustained multiple injuries in a road traffic accident on Mukobeko Road. The accident happened when, Binwell Nyimbili, the driver of a Toyota Hiace registration number ACJ 9477 lost control and hit a tree. The deceased has been identified as Greenwell Sibanda, 46, of Shuputa village of chief Chipepo.
Sibanda's body is lying in Kabwe General Hospital mortuary awaiting postmortem while the injured are admitted to the same hospital. Meanwhile, police assistant public relations officer Esther Mwaata Katongo stated that police in Mongu have impounded a truck carrying copper with fake documents.
"In Mongu, we have impounded a Volvo truck registration number AAL 1951 which was carrying copper with fake documents and had no clearance from police. According to the driver, the truck was coming from North Western Province," stated Katongo. "The copper has been sent for tests to ascertain its genuineness."
Labels: COPPER
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KCM in 20% copper production rise
By Abigail Chaponda in Chingola
Thu 18 Oct. 2012, 11:20 CAT
KONKOLA Copper Mine chief executive officer Jeyakumar Janakaraj has revealed that the mine has recorded an increase of 20 per cent in copper production in the first half of this year.
Presenting the KCM overview on investment, production, exportation and development to the media at Protea Hotel Chingola yesterday, Janakaraj said KCM produced 200,000 metric tonnes of finished copper during the 2011 to 2012 financial year.
"The copper production for the first half of the last financial year was 86,000 metric tonnes and the figures for the same period this year have increased by 20 per cent," he said.
He attributed the increase in the mine's copper output to the increase in production at Konkola and Nchanga mines.
He said the production was as a result of the fast development works such as of installation of equipment at the fourth shaft and commissioning of the Nchanga Concentrator which had replaced the old concentrator.
Janakaraj said despite the increase in copper production, there was an anticipated fall in copper prices on the London Metal exchange caused by forces of supply and demand and overstocking of copper by the largest buyer, China, which has stocked one million metric tonnes of the commodity.
He also said there was need for the government to come up with favourable stable taxation policies for the mining sector, which he said was a long term investment project which does not produce returns immediately.
"It takes six years to develop a mine and it takes 20 years for the investor to start receiving returns. Small changes that plaque the mining sector negatively affect the performance of the mining sector," he said.
He said KCM was working in collaboration with the Zambia Development Agency and the Zambia Consolidated Copper Mines investment Holdings (ZCCM-IH) on coming up with cheaper value addition products apart from making copper wires and coils which were costly to export because of their being heavy in nature.
Labels: COPPER, KCM
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COMMENT - $7200 per tonne is still over $5000 higher than when the mines were state owned. And the private sector is complaining?
Copper prices plummet to 6-month low
By Gift Chanda
Mon 25 June 2012, 13:25 CAT
COPPER prices dropped to a six-month low on Friday around US$7,200 a tonne on concerns of a shaky economic outlook. The metal was weighed-down by fresh concerns on the future global economic performance which were triggered by weak German and US data and a downgrade of some of the world's leading banks.
Three-month copper on the London Metal Exchange touched a session low of US$7,219.50 a tonne, its weakest since December 19, 2011. In earlier sessions, copper was hovering around US $7,281 a tonne.
Investors have been sitting on the fence after China's factory sector shrank for an eighth straight month, business activity in the euro area contracted for a fifth month and US manufacturing grew at its slowest pace in 11 months.
German business sentiment fell to its lowest level in more than two years, and Moody's cut the credit ratings of 15 global banks, including JPMorgan and Morgan Stanley, according to media report.
Meanwhile, the kwacha is expected to hold against the dollar this week after posting marginal gains last week.
The local currency traded at K5160 and K5180 per dollar for bid and offer, respectively.
Barclays Bank market experts stated that there had been notable reduction in dollar demand last week against spurts of supply flows.
"Outlook for the medium term continues to point to a stable local unit given that the economy remains strong with average growth forecast at 6.9 per cent this year and 7.1 per cent next year on the back of strong performances in the construction, manufacturing and tourism sectors driven by persistently strong FDI inflows," the bank stated in its daily market update released Friday.
Labels: COPPER
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COMMENT - 30,000 tonnes of copper? That sounds like a whole lot. At $8000 per tonne, that would be $240 million? 30,000 tonnes is 30,000,000 kilos. Is the writer sure that this isn't a typo? This story is very fishy.
Chingola cops arrest 2 Chinese for copper theft
By Misheck Wangwe in Kitwe
Thu 07 June 2012, 13:24 CAT
TWO Chinese nationals have been arrested for theft of more than 30,000 tonnes of copper ore from Konkola Copper Mines. The recovery of the copper ore by the police Anti-Copper Crack Squad yesterday became the biggest recovery of stolen copper ever recorded.
Police sources revealed that the named suspects, who included a woman, had been arrested and detained in Ndola for copper theft. The sources said the named company was raided by police around 10:00 hours on Tuesday.
"Apparently these Chinese nationals have been in this business of stealing copper for some time now. It was a tip-off from the public and we moved in.
We found heaps and hundreds of bags of copper ore suspected to have been stolen from KCM," a police source said.
The sources said police had started taking the copper ore to KCM plant in Chingola for safekeeping pending further investigations and the suspects would appear in court soon.
"We have detained the two Chinese nationals in Ndola because we strongly feel that there are many people connected to this case even within the police.
These Chinese nationals like corrupting police officers and we know that some police officers are connected. They have been eating with these Chinese so we don't want this case to be compromised. The law must take its course," a police source said.
The sources said fighting copper theft on the Copperbelt was a huge challenge as many Chinese were allegedly in the copper business but had no mines.
The sources said it was sad that they were no strong regulations on the Chinese entering the country in the name of investors.
"Many of these guys don't have mines; they don't have refineries or anything. They have just put up fake companies and they are stealing from major investors like KCM. They are doing a disservice to this country and they must be checked because the country is on the losing side because of their presence," a police source said.
Labels: CHINESE, COPPER, CORRUPTION
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'Mufulira copper among purest in the world'
By Misheck Wangwe in Kitwe
Wed 06 June 2012, 13:24 CAT
COPPER mined from Mufulira is considered amongst the purest in the world, according to Mopani Copper Mines. In an interview at the just-ended Copperbelt Agriculture, Mining and Commercial Show, Mopani's employee relations manager George Mayeya said the company was committed to making a profit from the high grade copper produced at its mine for the benefit of its stakeholders and the people of Zambia.
Mayeya said the focus of the company was to increase production and reducing the cents-per-pound cost of copper and cobalt through the consistent use of internationally acceptable management and mining practices.
He said significant strides had been made by the company to increase production and contribute significantly to national growth through the completion of major projects at the mine such as the replacement of the 1937 Mufulira Smelter Electric Furnace with a new high-intensified smelting furnace which uses Isasmelt technology.
Mayeya said to accommodate the increased capacity of the new smelting configuration, upgrading of the converter had been approved.
"The upgrade will allow Mopani to source and treat concentrates produced from other Zambian companies. In conjunction with a new smelting company configuration, an acid plant has been constructed to convert the off-gas generated by the Isasmelt furnace into sulphuric acid that can be used in metallurgical leach projects," Mayeya said.
He said the acid plant would significantly reduce the sulphur dioxide emissions and particulate matter discharge from Mufulira Smelter.
Mayeya said an oxygen plant had also been constructed at the Mufulira site to meet the oxygen demands of the new smelting processes.
He said under the third and last phase, Mopani was installing three converters and an acid plant which will be commissioned in December 2013.
Mayeya said once completed, it would reduce sulphur dioxide emissions by 97 per cent.
He said the company's commitment was to measure success by achieving targets towards the goal of zero harm to the environment adding that the policy supports Mopani's commitment to sustainable development.
Mayeya said the company so far employed over 8,000 direct employees with a complement of contract labour of more than 7,800.
Labels: COPPER, MOPANI, MUFULIRA
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Firm hits new copper spot
April 16, 2012
By DAILY MAIL REPORTER
CALEDONIA Mining Corporation says it has discovered a new copper zone at Nama Project in the Copperbelt Province and phase one drilling is expected to commerce this year.
The company holds licences covering squares of kilometres adjacent to Konkola and Vale/ African Rainbow Minerals properties.
According to information contained in the company’s interim results as at December 31, 2011, issued in Lusaka recently, it says Konkola east is the target for the project with preliminary holes drilled in 2011 which identified a new copper-bearing mineralised zone.
We have made an exciting discovery of a new copper-bearing mineralised zone at the Nama project in Zambia. Phase one drill of the year 2012 exploration programme to further confirm the shallower up-dip extension has commenced,” reads the report.
Labels: COPPER, COPPERBELT PROVINCE, KCM, VALE
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Zambia needs to move from dependecy on copper - World Bank
By Gift Chanda
Mon 26 Mar. 2012, 12:00 CAT
THE World Bank says Zambia urgently needs to diversify its economy and end dependence on copper for it to attain the Vision 2030.
Visiting World Bank managing director Sri Mulyani Indrawati observed that the Zambian economy is over-dependent on a few commodities and few activities, a situation she said made the economy very vulnerable.
She said the economy would need to be "rebuilt and diversified" for the country to achieve the goals and objectives under the country's Vision 2030.
Indrawati said this when she launched the One-Stop Shop and Business E-registry in Lusaka on Thursday.
The E-registry simplifies and shortens the registration process by enabling firms to proceed with all licensing steps at a single location.
"Having this one-stop service is a very strategic first stop for Zambia because it will easy and provide all the necessary information for the business community and the private sector initiative to get all the necessary information and most important finish all the registration under one place in an easy process," Indrawati said.
She said the initiative would make Zambia improve in terms of the way it does business in the region.
Indrawati said reform processes had put Zambia in the top position compared to other sub-Saharan African countries when it comes to the ease of doing business.
"Zambia is now ranked seventh in Sub-Saharan Africa when it comes to the overall ease of doing business. But that is not adequate," Indrawati said.
"Simplifying procedure and ensuring that you ease doing business here is actually the first step for the private sector to prosper as well as create jobs in this country."
She said the government would need to review all policies that have been hampering economic diversification and employment creation.
Indrawati also called for capacity creation in institutions relevant to the country's economic growth.
She said the World Bank stood ready to assist Zambia in its economic diversification quest.
"We are pleased to be Zambia's partner in working towards a sustainable model of growth which relies not only on the exploration of natural resources, but also on the development of the country's private sector," said Indrawati.
In sub-Saharan Africa, entrepreneurs often find it expensive and slow to both open and maintain a business, hampering their ability to expand their enterprise and create jobs.
Zambia's Private Sector Development Reform Programme (PSDRP) has been accelerating regulatory reforms in a number of key sectors with an aim of reducing the cost of doing business in the country.
It has already expanded the one-stop shop in Livingstone and plans to open similar offices in other parts of the country.
Commerce minister Robert Sichinga said the government would create one-stop shops in all provinces.
"The one-stop shop and e-registration are two concrete steps we are taking to empower business in Zambia," said Sichinga.
"We are committed to an all-encompassing programme of business reform which will have a lasting impact on the private sector."
Labels: COPPER, ECONOMIC DIVERSIFICATION, ROBERT SICHINGA, SRI MULYANI INDRAWATI, World Bank
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Share price of an Aussie listed company up 45% after announcing the discovery of high grade copper in Mumbwa
TIME PUBLISHED - Thursday, February 23, 2012, 6:08 pm
An Australian-based resources company called Blackthorn Resources caught investors’ attention in Australia when it announced that it had discovered high grade copper from its Mumba project exploration. The Company reported that it had intersected the best copper intersections recorded to date at the Company’s 100% held Mumbwa Project.
Included in this intersection were the high grade lengths of; 17 metres at 14.88% copper from 211 metres; 10 metres at 10.06% copper from 265 metres; and 10 metres at 9.11% copper from 283 metres.
Blackthorn is exploring the area for Iron Oxide Copper-Gold style of mineralisation.
Drilling is ongoing at the project, with the phase five program to include 19 holes for around 9700 metres, and will wrap up in about a months’ time – with assays to follow thereafter.
By the close, Blackthorn’s shares had added $0.315 or 44% on the day to $1.025, with more than five million shares changing hands.
[Proactive Investors news]
Labels: COPPER
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COMMENT - It is galling that the Zambian government managed to keep the mines going when copper prices were at $2,000 per tonne, but these so-called efficient private sector mining companies are complaining that prices won't rise over $10,000 per tonne. They are only efficient in lining their own pockets.
Copper prices unlikely to exceed $9,000 - De Wet
By Kabanda Chulu
Fri 17 Feb. 2012, 12:00 CAT
COPPER prices in 2012 are not likely to exceed US$9,000 per tonne due to the decline in the Chinese construction sector, says Standard Bank head of commodity strategy Walter de Wet.
And de Wet stated that global copper consumption is expected to grow by 1.2 per cent
in 2012 to reach 20.3 million metric tonnes. In a statement yesterday, de Wet stated that for most investors, copper was a base metal of choice and its price provides insights into how traders viewed the global economic outlook.
"But to analyse the global copper demand, outlook for the Chinese market, the largest global consumer, needs to be considered in detail. After stabilising over the second half of 2010 and into the first half of 2011, Chinese property sales growth started to deteriorate again in September 2011," de Wet stated.
"We expect sales growth to decline further during the first half of 2012. Most of the growth in construction to date has come from the private sector, with government related property development making up only a small percentage of total developments, so this declining health of the Chinese construction sector poses a real risk to demand and prices are unlikely to be much above US$9,000 per metric tonne for 2012."
He explained that construction currently accounts for 55 per cent of China's total copper demand with domestic consumption accounting for around 29 per cent while exports account for 16 per cent of total demand.
"Exports are perceived to be the primary risk to Chinese copper consumption but this sector constitutes only a modest percentage of total demand. For demand to remain at current levels, domestic consumption would need to fill the gap," stated de Wet.
"Despite macroeconomic unrest in the West, the US and Europe are still key players in the global copper market."
Labels: COPPER, STANDARD BANK LONDON
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