Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Atalaya Mining (LON: ATYM) has restarted operations at its Riotinto copper mine in Spain after local authorities in Andalucía determined that mining operations supplying other essential industries should remain open.
The Cyprus-headquartered company closed the mine on March 30 in response to the Spanish government’s royal decree, which ordered the suspension of non-essential business operations, including mining.
On Friday, Andalucía’s mining department informed Atalaya that the definition of an essential industry had been extended to include mining.
The company said strict health and safety procedures were still mandatory for workers onsite.
Local authorities in Andalucía determined that mining operations supplying other essential industries should remain open
“Associated to these measures, Atalaya will maximize the stockpiles available on site, defer all non-essential activities and focus on the production of concentrates to fulfill national and international commitments to supply other industries,” Atalaya said.
Spain saw on Sunday its third consecutive daily decline in the number of people dying from covid-19.
Atalaya, which reopened the legendary Riotinto mine in 2016, has so far kept its 2020 guidance of between 55,000 and 58,000 tonnes of copper, a significant increase from the 42,114 tonnes it churned out last year.
The miner also has a brownfield project in sight, Proyecto Touro, located in northwest Spain.
The news comes on the same day that Fitch Ratings cut its short-term price assumptions for certain metals, including copper, as a result of considerably lower economic activity.
Unprecedented lockdowns in much of Europe, the United States and Latin America are significantly reducing commodity consumption, the ratings agency said.
Fitch now expects global growth to contract by 1.9% in 2020, translating into a fall in global copper demand of 6% from last year.
Although production disruptions in Chile, Peru, Mexico and Canada will remove significant volumes from the market, Fitch still expects copper to be in oversupply. As a result, it has reduced price assumptions to $5,300 a tonne this year and $5,800 per tonne in 2021.
