Hopes for repeat of May’s copper price blowout fades
Copper prices fell sharply on Tuesday after hopes of further stimulus in China evaporated and conditions for a repeat of May’s record setting squeeze faded.
The Democratic republic of Congo has blocked exports of unrefined copper and cobalt concentrates in an effort to push miners to add value to the commodities, before shipping them outside the country, Mines Minster Martin Kabwelulu told Bloomberg.
The order signed by Kabwelulu on April 5, gives mining firms 90 days to clear their stocks before the ban comes into force. “Little by little, within the next three months, we need to no longer export concentrates,” Kablwelulu told Reuters.
Canadian diversified mining company with investments in Africa, Lundin Mining Corp. (TSX:LUN) dived the most in more than 18 months on the news. It fell 9.9% to C$3.73 at 1:08 p.m. ET, after falling 10% earlier, the most intraday since Sept. 22, 2011.
Another victim was Ivanplats Ltd. (TSX:IVP), which saw its shares collapse almost 18% to C$2.96. The company owns the Kamoa copper project is in Congo and on March 28 said it was planning a drilling program at its nearby Kipushi project, which includes a historic zinc-copper mine.
The DRC was the eighth largest copper producer in 2012, with an output of about 500,000 tonnes per year. The African country was also the largest cobalt producer during the same period.
