Silver Mountain receives go-ahead to restart Reliquias mine in Peru
Once restarted, the Reliquias project would deliver approximately 2.2 million oz. of silver-equivalent production annually over a nine-year life.
The inclusion of battery metal lead in the Bloomberg Commodity Index (BCOM) for the first time will boost the profile of the metal among fund managers and traders.
Bloomberg said last week that lead had met the criteria for joining the index and would become the 24th component starting next year.
“Asset managers tracking the BCOM index will now be forced to purchase LME lead contracts during the index fund roll period in early January. Friday’s price jump reflects the market’s anticipation of this future buying requirement,” said analyst Tom Mulqueen at Citi.
The benchmark lead price on the London Metal Exchange (LME) spiked as much as 8.3% on Friday to $2,019.50 a tonne following the news, but has since pared gains to around $1,970 on Tuesday morning.
Lead will have a weight in the index of 0.936% compared to copper, which has 5.23%.
The index looks at five-year averages of exchange liquidity and production data to determine which commodities are included and which weightings are assigned.
World production of lead has increased enough over the years even while trading liquidity has decreased so it qualified for inclusion in 2023, Bloomberg said in response to an enquiry.
“Lead has been on the cusp of entering BCOM for many years, narrowly missing the minimum threshold rule for inclusion,” Bloomberg said.
Global lead metal production rose 3.5% in 2021 to 12.38 million tonnes, according to the International Lead and Zinc Study Group.
Trading volumes of lead on the LME last year slipped 3.8% to 10.3 million lots while the price gained 16%.
(By Eric Onstad; Editing by Ed Osmond)
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