Soaring demand for copper will help drive mergers, BHP CEO says
Demand for copper, a key element in the energy transition, is set to rise by 70% to 100% by 2050, Mike Henry said
Candelaria mine.
Freeport-McMoRan Copper & Gold’s (NYSE:FCX) Chilean copper mine Candelaria has attracted the interest of Magris Resources, the private equity firm founded by former Barrick Gold Corp (TSX:ABX) chief executive Aaron Regent.
Citing unnamed sources, The Wall Street Journal says the mining complex — one of Freeport’s largest— has been in the market for some time.
The open-pit and 6,000 metric ton-per-day (mtd) underground copper mine, located in Chile’s copper-rich north, is adjacent to the Ojos del Salado mine. Combined production from both operation reached 87 million pounds of copper in the first quarter, roughly 9% of total production of the red metal at Freeport’s mines.
Thanks to these and other copper assets, the Arizona-based company surpassed Chile’s state copper producer Codelco in 2013, briefly reaching the status of world’s largest copper producer.
5 Comments
Mike Failla
…….and the reason is….why?
Guest
Debt reduction. With no exports coming out of Grasberg, the mine is burning through cash. Although Freeport is still strongly cash flow positive, it needs to meet its debt reduction targets after their acquisitions of MMR and Plains. Candelaria and Ojos de Salado are not exactly conventional Freeport operations. The deposits are IOCG and it looks like the underground mining is done through sublevel stoping. Freeport doesn’t really do sublevel stoping – they’re an open pit producer, almost exclusively through porphyries. 6000 tons a day from an underground at Candelaria isn’t exactly huge. Grasberg will be block caved but that’s an entirely different beast. Freeport needs to sell something, and they’re definitely not going to kick out US mines (too many synergies), Tenke, Grasberg, El Abra or Cerro Verde. I can’t speak on the calculus behind whether or what oil and gas assets could go on a chopping block. Candelaria is a good property but something’s got to go.
Guest
Probably low grade without further prospects.
123
costs keep rising
Mike Failla
I am thinking maybe all of the above? If Freeport is interested in a good mining project that is relatively stable they have to look no further than…….hold on….Rosemont! Just saying that from what I can see tailor made for them.