Need for Copper Catalyzing Cos. Worldwide

The world is switching to greener sources of energy; there's no debate over that.

Many metals once prized for other uses are now valued for properties that make them important for use in the batteries that power electric vehicles (EVs) and the capture of solar energy to power that transition.

The Catalyst: Sparking a New Electric World

According to Credendo, demand for copper could double by 2035, as EVs use more than three times as much of the red metal as gas-burning cars. New copper production — and investment in exploration — will be needed to fuel the supply of those vehicles in the long term, analysts have said.

"The main drivers are the revival in demand from Chinese manufacturers, the rebound of the global economy, and the boom in investments in green technologies (e.g., renewables and electric vehicles) and in AI technologies," the site reported last month.

The hunt for copper "has been accelerating, as companies involved in all parts of the copper supply chain realize the structural supply deficit facing the copper market," wrote Rick Mills, author of the newsletter Ahead of the Herd.

"They understand the need to find sources — existing mines, expansions, brownfield projects, greenfield projects, etc. — and are making deals to acquire the base metal, which is not only essential to electrification and decarbonization but industry in general," Mills wrote.

Copper climbed above US$10,000 a ton in May, based on predictions of tighter supplies and rising consumption for electric vehicles (EVs) and power grids in the transition to green energy. It was US$8,780 per ton on June 28.

Michael Ballanger of GGM Advisory Inc. wrote for Streetwise Reports on Monday that "the technical picture for copper could not get any more bullish. You have a 'neutral' RSI down from 'overbought' while just entering a bullish MACD crossover and 'buy signal' along with a bullish money flow indicator."

"More importantly, the Twitterverse is now silent . . . as sentiment has become subdued once again and conditions ripe for the turn," the analyst continued.

BMI analysts believe copper deficits could grow at an extreme pace over the coming decade as the clean energy revolution takes hold, predicting prices of US$11,500 per ton by 2032.

"In the longer term, we expect the copper market to remain in deficit as the green transition accelerates along with the demand for 'green' metals, including copper," BMI's analysts said, according to Stockhead.

"Based on industry-wide capital intensity data, we calculate that some US$196 billion of investment will be required," a market analysis issued by RFC Ambrian said.

An S&P report called copper "one of the most underappreciated critical minerals."

"Deeper electrification requires wires, and wires are primarily made from copper," the report said.

Large Copper Players

Two of the world's largest miners producing copper, Anglo American Plc. (AAUK:OTCQX; AAL:LSE) and Glencore International Plc. (GLNCY:OTCMKTS; GLEN:LSE), both own 44% each of the Collahuasi Mine in Chile, the world's second-largest copper mine with one of the largest copper reserves in the world: 3.93 billion tonnes of ore grading 0.66% copper, Anglo American said.

Glencore extracts and processes copper ore in South America, Africa, and Australia, and recycles copper scrap in North America, in addition to smelting and refining the metal. Anglo American has prized copper assets in Chile and Peru, including the Collahuasi, El Soldado, and Los Bronces mines. This is in addition to a smelter at Chagres.

Anglo American's copper assets attracted the world's top mining company, BHP Group, which made three attempts to take over Anglo American this spring and failed.

"BHP's aim was to secure Anglo's prized copper assets in Latin America and increase access to a metal central to the global shift towards clean energy and electric vehicles (EVs)," wrote Clara Denina, Felix Njini, and Melanie Burton for Reuters on May 29. "But the structure of BHP's deal, which required Anglo to unbundle its South African platinum and iron ore businesses, was a major reason for its collapse."

Anglo American Plc.

Anglo American Plc. (AAUK:OTCQX; AAL:LSE) is a leading global mining company headquartered in London that produces "essential ingredients in almost every aspect of modern life," the company said on its website.

"Our portfolio of world-class competitive operations, with a broad range of future development options, provides many of the future-enabling metals and minerals for a cleaner, greener, more sustainable world and that meet the fast growing every day demands of billions of consumers," the company noted.

Anglo American is a producer of copper, nickel, platinum group metals, diamonds, premium quality iron ore, and steelmaking coal.

In May, as it fought off BHP, its stock on the OTCQX rose as high as US$17.44 per share but has since cooled to US$15.27. Also in May, the company announced it was divesting some assets for a simpler portfolio. Steelmaking coal, nickel, and platinum are being divested, and the company's diamond division, De Beers, could be divested or demerged.

The company would instead focus on copper with three of the top 10 producing copper mines in South America, premium iron ore in Brazil and South Africa, and crop nutrients.

"We are taking clear and decisive action to deliver value — safely, responsibly, and reliably — in the long-term interests of our shareholders and other stakeholders, and to deliver the products that are so critical to enabling the energy transition and supporting improved global living standards and food security," said Chief Executive Officer Duncan Wanblad.

According to Reuters, Anglo American Plc is 0.28% owned by insiders and management, 70.59% owned by institutions, and 9.57% owned by strategic entities. The rest is in retail.

Top shareholders include BlackRock Investment Management with 9.51%, Public Investment Corp. with 6.77%, The Vanguard Group Inc. with 4.38%, the Wellington Management Co. with 3.6%, and Tarl Investment Holdings (RF) Pty, Ltd. with 3.53%., Reuters reported.

It has more than 1.34 billion shares outstanding with 1.2 billion of them free floated shares, Reuters reported. Its market cap is US$41.60 billion, and it trades in a 52-week range on its OTCQX listing of US$17.60 and US$10.37.

The company trades on multiple exchanges, with the London Stock Exchange having the largest volume.

Glencore Plc.

Glencore International Plc. (GLNCY:OTCMKTS; GLEN:LSE) also has looked at divesting some assets. It was reported on Wednesday that the company has dropped its plan to sell its stake in Kazakh mining company Kazzinc after potential buyers failed to match the company's valuation, Bloomberg reported.

"Glencore Chief Executive Officer Gary Nagle has continued his predecessor's strategy of looking to simplify the business, selling off smaller or more challenging assets," Pei Li and Thomas Biesheuvel wrote for Bloomberg. "The company has already sold zinc assets in Peru and some of its smaller copper operations."

However, the company still has plenty of major exposure to copper with its operations on four continents.

The Swiss company is one of the world's largest commodity traders, active in markets for energy products and agricultural goods in addition to metals and minerals.

Core exposures include the production of thermal coal, coking coal, copper, zinc, nickel, cobalt, and ferroalloys, according to a report by GuruFocus Research.

"Unlike other major miners, Glencore plans to produce thermal coal until its mines exhaust, arguing that it is better for listed, western companies to own these assets and then rehabilitate them consistent with Western standards," the researchers said.

The company also has a consistent dividend payment record since 2021, according to GuruFocus. It has reported net profit in seven years out of the past 10 years.

Reuters reported that 9.96% of Glencore is owned by insiders and management, 48.31% by institutions, and 0.39% by strategic investors.

Top shareholders include former Chief Executive Officer Ivan Glasenberg with 9.93%, Qatar Holding LLC with 8.58%, Capital Research Global Investors with 5.27%, GQG Partners LLC with 4.13%, and The Vanguard Group with 3.83%.

The company has a market cap of US$73.83 billion on its OTCPK listing with 12.2 billion shares outstanding, 10.9 billion of them free floating. It trades in a 52-week range of US$12.74 and US$9.26.

The company trades on multiple exchanges, with the London Stock Exchange having the largest volume.

Private Co. Coming Into the Fold

While Anglo and Glencore may be the big players, one private company is hoping to break out onto the scene. Electrum Copper Corp. also offers significant exposure to copper, molybdenum, and silver and could soar if it makes an important discovery at its flagship project, according to the company. 

Prior to Electrum's acquisition, its now wholly-owned Candela Mine has an operating history dating back many decades. More recently, Electrum has been conducting small scale mining and processing of copper and gold and is currently installing new equipment to increase capacity for both, while examining the feasibility of commencing molybdenum mining in the short term.

The company is continually releasing drilling results from Candela and is working toward a resource estimation in early Q4 and is drilling an induced polarization (IP) anomaly that could produce a "blind discovery" with no surface signs, which President and Chief Executive Officer Robert Archer told Streetwise Reports "could be a real game-changer for the company."

"The geology there, everything that we've been seeing to date, indicates that is a possibility," he said.

Electrum's latest assay results, released on June 4, showed strong intersections of copper mineralization within the project's open pit and an adjacent "exotic" copper zone. Highlights included 1.08% copper (Cu) over 73.85 meters, including 4.7% Cu over 8.95 meters, 2.79% Cu over 2.75 meters, and 3.33% Cu over 3.95 meters, all in hole BP-24-16.

Other results included 0.84% Cu over 6.65 meters, 0.69% Cu over 8.60 meters, 0.70% Cu over 7.25 meters, and 0.60% Cu over 14.25 meters in hole BP-24-17; and 0.98% Cu over 76.10 meters, including 2.10% Cu over 17.95 meters and 4.06% Cu over 6.45 meters, 0.50% Cu over 12.50 meters, and 0.51% Cu over 17.80 meters, also in BP-24-18.

"These recent drill results not only confirmed the continuity of copper mineralization in the 'exotic' copper zone but expanded the already significant mineralization within the breccia pipe," Archer said. "Visually, we continue to see strong copper and molybdenum mineralization in subsequent holes, and we look forward to receiving those assays in due course."

According to Mining.com, anything over 100 meters and 1% copper equivalent or better is considered to be high-grade. 

Electrum's other project, Don Indio, also in Mexico, has also given excellent copper grades of 0.51% to 3.23% in field and exploration work, and silver grades of 33 grams per tonne (g/t) to 143 g/t over 0.4 meters to 6.05 meters.

Two drills have just completed a resource definition program at Candela's pit, and assays will be reported as received, the company said.

The company said insiders and management own 38.9% or 17.4 million shares. Several institutions also have significant positions: Generation IACP Inc. with 4.9% or 2.175 million shares, Davos Equities LLC with 1.3% or 600,000 shares, and NTG Capital LLC with 0.2% or 100,000 shares.

The company said it has 44.78 million shares outstanding and a market cap of US$22.39 million.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Electrum Copper.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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