When looking at global exploration budgets for copper, which reached $11-billion in 2010, it is evident that the nonferrous metal carries perennial importance, mining analysis company SNL Metals & Mining says in its 'Copper Discoveries 1990-2014' report, released on Monday. 

“After almost doubling by 2012, the total nonferrous metals exploration budget returned to 2010 levels again in 2014. Over those five years, the copper budget increased more or decreased less as a percentage year-on-year than the total budget; and more remarkably, copper's share of the total budget increased in each of the five years, even as budgets were shrinking. 

“In 2014, copper accounted for fully a quarter of the [nonferrous] industry's total budget, a 15-year high for the red metal,” the group reported on Monday. Further, SNL Metals & Mining noted that it was “no surprise” that acquiring companies paid more for copper in mineable reserves than they paid for resources, since reserves could either immediately increase a company's production, or add to its pipeline of potential production, without the expenditure and time otherwise required to prove up reserves. 

“The prices paid per pound for copper in reserves and copper in total reserves and resources generally moved in tandem from 2005 to 2009,” it noted. However, these prices diverged sharply after the 2008/9 financial crisis, with the reserves price soaring close to 50c/lb by 2011 – the highest price paid in the ten-year period – while the price paid for combined reserves and resources increased much more slowly. “The divergence partly reflects most major producers' then strategy of increasing production. 

With recovering copper prices seemingly headed for the stratosphere, adding mineable reserves seemed like a good investment at the time,” SNL Metals & Mining highlighted. However, the copper price started declining in 2012, and “angry investors” started forcing the major companies to curb spending and focus on increasing value. 

As a result, mergers and acquisitions (M&A) spending in 2013 dropped by three-quarters from a record $30-billion in 2012, and the price paid for copper reserves fell to 30c/lb in 2013 – on par with the ten-year average through 2014. M&A activity revived somewhat in 2014, with the price paid for copper reserves perking up slightly and the total price paid in copper acquisitions jumping 45% from the 2013 price. 

The report outlined 201 copper discoveries over the past 25 years, each containing at least 500 000 t of copper, and included the relationship between corporate exploration budgets and discovered copper, and separate sections for discoveries by year, by location, by company type and by classification as greenfield or brownfield.

http://www.miningweekly.com/article/new-report-outlines-value-of-copper-exploration-2015-06-29

Indophil Resources said a final agreement may be signed in the middle of July allowing it to take control of the long-delayed $5.9 billion Tampakan copper-gold project in the Philippines from Glencore Plc .

Indophil, previously listed in Australia until its takeover this year by the Philippines' Alsons Group, would be able to start planning its next steps for the project once the agreement was signed, spokesman Gavan Collery said.

"There are a number of conditions, notifications and actions that must take place before the anticipated mid-July formal signing of the agreement," he said in an email.

Commodity trader Glencore announced the sale of its 62.5 percent interest in Tampakan operator Sagittarius Mines Inc last week without providing details.

Glencore had previously flagged it was reviewing the Tampakan project along with other greenfield projects elsewhere.

Tampakan, one of the biggest undeveloped copper-gold mines in Southeast Asia and previously touted as the largest foreign direct investment in the Philippines, has been stalled by a provincial ban on open-pit mining in place since 2010.

Leo Jasareno, director of the Mines and Geoscience Bureau (MGB), said the government welcomed Indophil's interest "to move the project forward" and said Glencore's exit had nothing to do with domestic policy issues.

The MGB's support for the project, at the same time as a local mining ban is in place, highlights conflicting policies that have hampered development and foreign investment in the country's untapped mineral resources worth $1.4 trillion based on recent industry estimates.

There are also pending bills in Congress seeking to hike mining taxes and royalties that are already among the highest in the world.

http://www.reuters.com/article/2015/07/01/glencore-philippines-tampakan-idUSL3N0ZB1BF20150701

Rio Tinto's aluminium smelter in New Zealand, which has suffered losses in two of the last three years, faces a July 1 deadline to decide whether to extend its power supply contract with utility Meridian Energy .

The decision could determine the future of the 350,000-tonne-per-year smelter, which is the country's single biggest energy consumer, beyond 2017 following a battle by the plant's owners to slash its power costs.

The smelter has struggled with weak aluminium prices and a high New Zealand dollar for several years, and has been seeking cheaper power, even though it returned to an underlying profit of NZ$56 million in 2014 after two years of losses.

The plant was given a NZ$30 million subsidy in 2013 by the government to bridge the price gap between Meridian and the plant's owners, New Zealand Aluminium Smelters (NZAS), which is a joint venture between Rio Tinto and Sumitomo Chemicals.

NZAS also has an option later in the year to reduce the amount of power it buys from Meridian by about 30 percent.

The two sides have been holding talks on the issues, but NZAS declined to comment, while a Meridian spokesman said it did not know what the decision would be.

In April, NZAS Chief Executive Gretta Stephens said in a statement the plant faced "an extremely tough operating environment here in New Zealand."

Some analysts said that the likelihood of the smelter remaining open had increased after the local dollar had fallen 12.6 percent so far this year, improving the smelter's export returns and helping to offset a renewed weakness in aluminium prices which are hovering around one year lows.

"With the lower New Zealand dollar, most expect NZAS will seek to maintain power contracts, with some potential to gain some supply from another generator," said analyst Craig Stent at Harbour Asset Management.

The smelter is one a few worldwide making high-quality aluminium used in plane construction and electronics, and the costs of closing the plant and cleaning up the site has been estimated at hundreds of millions of dollars.

Longer term, the New Zealand power sector regulator is looking at reforms to setting transmission charges which might deliver savings of as much as NZ$50 million a year.

The smelter, close to the southern city of Invercargill, consumes about 13 percent of New Zealand's power output and a decision to close would cause a glut, sending prices lower in a market which has seen scant growth.

http://www.reuters.com/article/2015/06/30/new-zealand-rio-tinto-smelter-idUSL3N0Z90ZC20150630