Small firms swoop on copper
Glencore is selling off several of its Australian copper mines as the commodity goes wild.
The price of copper is reaching unprecedented highs, leading some to describe it as “the new oil”.
Global copper stockpiles are running low, while demand from renewables, construction, energy and transport industries continues to rise.
Australia is among the world’s top 10 producers of copper. Investment bank Goldman Sachs has predicted that copper demand will have increased by nearly 600 per cent in 2030.
Australian firm Comet Resources has signed a deal to acquire Glencore's Mount Margaret copper project in north-west Queensland, which follows an announcement last month that Glencore would sell its CSA mine in New South Wales.
Additionally, Evolution Mining has taken over the Ernest Henry copper facility in Queensland after a similar deal was secured last year.
BHP's head of mineral operations for the Americas, Rag Udd, says the world has an insatiable appetite for copper.
“The world will need twice as much copper in the next 30 years as it has in the last 30 years,” he told the World Copper Conference last month.
Resources analyst Gavin Wendt said Glencore move to sell its copper facilities is not because of a lack of confidence in the sector.
“In the broad scheme of things, it's no surprise that a company of Glencore's size would be looking to offload projects like these – these assets really are not necessarily of relevance in terms of scale now,” Mr Wendt has told reporters.
“It's all about market timing. We've seen copper prices at record levels, and [are] likely set to go higher.
“With copper prices at the sort of levels that they are, it's the perfect time for Glencore to sell these assets, and they can be more meaningful for a company of smaller size.
“For Glencore, it's more a matter of offloading smaller operations than it is offloading copper specific projects.”
Speaking about the Ernest Henry deal last year, Glencore said it will retain the Mount Isa Mines copper and zinc complex, copper smelter and Townsville copper refinery.
“Glencore will also increase its focus on lower-cost, long-life copper assets in its global portfolio like those in Africa and South America,” it said.