Monsters of Rock: Copper miner 29Metals hits month high, ASM makes Korean deal
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Copper is a hot commodity right now as China signals its intentions to arrest a slow down in its economy.
The positive mood in the sector came despite a drop in copper prices brought about by rising LME inventories, which had recently sunk to 47 year lows.
“Base metals gained in early trade as expectations of further stimulus measures in China rose,” ANZ senior economist Adelaide Timbrell said.
“At the end of a three-day annual Central Economic Work Conference, the CCP said the top priority for next year was to ensure stability. They also vowed to front load policies and keep the monetary stance flexible and appropriate.
“However, most metals gave up those gains amid the risk-off tone across markets. Copper ended the session down 0.6%, with the fall exacerbated by the fourth consecutive day of gains in LME inventories.”
$1.3 billion copper miner 29Metals (ASX:29M) rose by more than 5% to a month high of $2.78 after announcing it was taking processing operations at its Capricorn copper mine in Queensland in house from February, in part so it can share staff across operations.
The miner also owns and operates the polymetallic Golden Grove mine in WA, where it has completed a tailings facility lift and received approvals for a paste plant to reduce its environmental footprint.
“The operating updates announced today are important building blocks delivering against our plans and supporting our growth strategy. These milestones are a testament to the hard work of our operating teams and our commitment to deliver against our operating plans,” 29Metals managing director Peter Albert said.
“The move to bring processing operation and maintenance at Capricorn Copper ‘in-house’ will enable greater alignment between the workforce and 29Metals strategic objectives.
“We thank Ausenco for its strong contribution at Capricorn Copper under the O&M contract over the past three years. We are working collaboratively through the transition with Ausenco and look forward to welcoming the current Ausenco O&M team as employees of Capricorn Copper.”
One Australian miner already poised to benefit from the Federal Government’s commitment to building a critical minerals supply chain with South Korea is Australian Strategic Materials (ASX:ASM).
The owner of the Dubbo rare earths project in NSW, ASM shares rose around 4% today ahead of news it had signed a “joint statement of cooperation” with the Korean Mine Rehabilitation and Resource Corporation to ‘expand the use of rare earths and critical metals in Korea and develop import opportunities that will secure the supply of these metals for Korean industry.’
Under the deal rare earths from Dubbo could be imported into Korea for the building of a strategic stockpile alongside domestic production of magnet feed at ASM’s planned Korean Metals Plant.
“This builds on the cooperative and collaborative relationship between Korea and ASM, creating further opportunities to engage on the strategic issue of critical minerals and metal supply,” ASM MD David Woodall said.
“This Joint Statement of Cooperation is another firm sign of Korea’s commitment to securing its supply of critical metals and to working with ASM to deliver an outcome that is beneficial to the Korean supply chain.
“ASM welcomes this opportunity to work with KOMIR to provide an alternative, secure and sustainable supply of critical metals. ASM will commence production of critical metals at ASM’s Korean Metals Plant in 2022.”
On the market gold stocks received a boost with inflation expectations rising to a new high, ANZ said, which augurs well for gold prices.
Northern Star (ASX:NST) was up 1.55%, while St Barbara (ASX:SBM) gained 3.37%. Lithium boomer AVZ Minerals (ASX:AVZ) hit a new high of 72c, gaining 3.6% following a ~18% rise on Monday shortly after a $75 million capital raising.
Fortescue (ASX:FMG) meanwhile, which has been overshadowed this week by its chairman Andrew Forrest’s private stoush with BHP (ASX:BHP) over Canada’s Noront nickel, rose 1.3% to $18.70 as iron ore hit multi-week highs of ~US$114/t.