El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
By Shihoko Goto — Exclusive to Copper Investing News
Bolstered by growing optimism about the global economy, particularly the US job market, which continues to expand, copper reached its highest level in 2012 this week. Also giving the red metal a push are expectations that Beijing will take concrete steps to help China avoid a hard landing. However, concerns linger that a steady rebound worldwide may not occur, especially in Europe.
Earlier in the week, copper reached above $8,700 per tonne on the London Metal Exchange as China reported that its manufacturing sector had gained strength. The Purchasing Managers’ Index rose to a one-year high of 53.1 in March, suggesting that policies taken since late last year to keep the economic engine revving are working. Expectations remain high that Beijing will either ease monetary policy or loosen bank reserve requirements to ensure that the world’s largest consumer of copper will avoid a hard landing.
However, that euphoria has somewhat abated, in part due to the unveiling of the Federal Reserve’s latest minutes, which revealed that the US is unlikely to receive further monetary easing any time soon. Certainly, the US economy appears to have found its footing; the latest weekly unemployment claims fell to the lowest level in four years, down 6,000 to 357,000, according to the US Department of Labor Thursday. Market eyes are already looking ahead though to the monthly national jobs data that is to be released before the opening bell Friday for further clues on the state of the US economy.
Europe continues to weigh down market sentiment, as any expectations that the continent could take a breather from worrying about the state of its economy were quashed by European Central Bank President Mario Draghi. The central banker dismissed any plans for the ECB to start planning for a retreat from providing emergency relief.
“Given the present conditions of output and unemployment, which is at historical high, any exit strategy talking for the time being is premature,” Draghi said.
Late Thursday, COMEX copper for May delivery was up 0.2 percent at $3.79 a pound, while copper on the LME closed up $11 at $8,361 a tonne.
Copper investors will be keeping close tabs on Indonesia as the government mulls the possibility of imposing a 25 percent export tax, which may go up to 50 percent in 2013, on base metals as well as coal. Indonesia is home to Freeport-McMoRan’s (NYSE:FCX) Grasberg mine as well as other key sites of multinational mining groups. Last year, Indonesia exported about $3.8 billion worth of copper.
Copper company news
Chilean state-owned Codelco announced a senior management shake up this week in an effort to maintain its position as the world’s largest copper producer. Julio Aranis will head its North division, which is responsible for the Chuquicamata, Gaby, and Radomiro Tomic mines, the Chuquicamata smelter and refinery, and the Ministro Hales deposit. Codelco’s smallest mine, the Salvador mine, was shifted to the Central-South division headed by Jorge Gomez, a former executive of Antofagasta (LSE:ANTO). In addition, two new vice presidencies, one for business development, and the other for technology and innovation, were created.
CuDeco (ASX:CDU) signed a structural steelwork supply contract with China’s Sinosteel. The contract will allow it to move ahead in developing its Rocklands project in Queensland. Sinosteel will be solely responsible for providing the Australian mining group with the structural steel requirements needed for the entire mineral processing plant.
The world’s oldest copper mine, at Skouriotissa, has now produced 50,000 tonnes of copper according to Cyprus Mail. The mine is owned by Hellenic Copper Mines and is the sole copper producer in Cyprus.
Junior company news
Dia Bras Exploration (TSXV:DIB) said its El Gallo mine in Mexico has expanded the boundaries of the current resource. In addition, drilling at El Salto has shown that the Upper and Lower Skarns extend to this area, which is 600 meters east of the current mining area. The latest results “represent a potentially major expansion of the resources of the Bolivar property….We have only just begun to discover the full potential of this extensively-mineralized area, ” said President and CEO Daniel Tellechea.
Vancouver-based Geologix Explorations (TSX:GIX) began trading on the OTCQX market under the ticker symbol GIXEF. The company’s primary focus is the Tepal gold-copper project in Michoacán State, Mexico, where it has completed a preliminary economic assessment study.
Securities Disclosure: I, Shihoko Goto, hold no direct investment interest in any company mentioned in this article.
