Hedge funds slash bullish wagers on gold before war jitters
Speculators have reduced net-long positions by 3.6%.
With ample reserves, the US has a number of uncommitted mining projects that would support COPxx climate change targets and the Biden administration’s lofty green energy transition and electric vehicle ambitions under the Inflation Reduction Act (IRA).
A top contender is the Resolution project in Arizona, near the town of Superior in the area known as the Copper Triangle, where mining activity dates back to the 1870s.
The deposit was discovered in 1995 and contained copper tops 10 million tonnes worth nearly $90 billion at today’s prices. The sixth-largest measured copper orebody in the world, it’s a deep underground, high-grade mine using block cave technology that shrinks its environmental footprint.
The world’s number one and two mining companies, BHP and majority shareholder in the project Rio Tinto, have already spent $2 billion on it, including reclamation of a historical mine.
Resolution Copper has enjoyed bipartisan support in the past and in 2014 former president Obama signed into law a Pentagon bill that included a clause inserted by then Arizona Senator John McCain allowing for a land swap so that the project can advance.
Trump, five days before leaving office, published a pivotal report – the Final Environmental Impact Statement – on the project, clearing the last major hurdle for construction to begin, which would take another decade to the start of commercial production.
The thousands of jobs and billions in state and federal revenue the mine will create over its 40+ year life makes Resolution the perfect candidate for fast tracking and government support under the IRA.
Right?
Wrong.
Biden rescinded the FEIS two months after its publication and Democrats also added specific wording to the infrastructure bill that would block the project.
And so 28 years after discovery, Resolution remains stuck in development hell.
Last month Resolution came before the House Natural Resources committee.
Under discussion was resolution 1378, which is so modest in its ambition, that it’s hard to imagine that the meeting went on for nearly an hour-and-a-half:
“Of inquiry requesting the President and directing the Secretary of Agriculture to transmit, respectively, certain documents to the House of Representatives relating to Resolution Copper mine.”
So in short, in the interest of transparency and oversight, show us the documents you used to throw out a 6-volume, nearly 3,000 page study.
The narrow ambit of the resolution did not stop committee members from airing their views on January 6, the Ukraine war, the “Gestapo tactics” of the Biden administration and at one point the Chair even accused another member of calling him a “copper thief”.
Among the submissions at the meeting was that of Congressman Tom McClintock representing the 4th District of California. Around the 17:00 min mark McClintock perfectly sums up what’s wrong with US mining policy:
“Mr Chairman I simply want to implore you and your democratic colleagues to reconsider the policies you have been pursuing.
“On the one hand you want to mandate not only electric cars but industrial scale backup batteries for wind and solar farms all in the name of saving the planet.
“Yet on the other hand you want to radically restrict mining; also in the name of saving the planet.
“Well you can’t do both.”
The resolution, which again, does nothing but request documents, was adopted by a 22 to 21 vote.
Its worth watching McClintock’s full comments which includes choice phrases like “childish fantasies” and “absurdities” in this clip. Or gluttons for punishment can watch the entire proceeding here.
