Striking Gold: University of Michigan to invest in Gold & Copper
The University of Michigan will announce plans to invest up to $30million in a fund to buy North American gold and copper mines from struggling businesses in a meeting with this week.
With mining companies struggling to cope in a fluctuating asset market and riddled with debt, the move, which will be boosted by a $30million endowment from June 30, would come as a breath of fresh air to the industry.
“These opportunities arise from the financial distress of mining companies who took significant amounts of debt for M&A activity prior to the collapse in commodity prices since 2011,” said Kevin Hegarty, chief financial officer at the University of Michigan.
“Now looking to strengthen their balance sheets, these financially distressed companies are selling assets to raise cash and reduce debt levels.” He added.
The investment is a joint venture with Waterton Mining Parallel Fund, managed by Waterton Global Resources. The proposal for investment will be discussed in a meeting with the Board of Regents on May 19.
Read the May 2016 issue of Mining Global magazine
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.