The best among the copper-producing companies

Investors may become interested in the copper-producing companies, as the prices of this red metal have been going up since the year 2016. Future of the companies continues to look positive and it is believed that near 2018 the copper stocks prices will go through another increase. Below we present the top companies from 2015. Have a closer look at their past and current condition.

Codelco

This (owned by state) company from Chile is the biggest copper producer in the world. Their production was increased in 2015 – from 1.839 million tonnes to 1.893 – despite a few complications. 1.366 million tonnes was their total production in the third quarter of 2016.

Freeport-McMoRan

For this company from Arizona the year 2015 turned out to be lucky. Their production of copper rose from 1.47 million tonnes to 1.547 million tones. Why are they successful? Mainly thanks to their asset in the Grasberg mineral district in Indonesia which has one of the largest copper deposits in the world. In 2016 their consolidated sales amounted to 4.65 billion pounds of copper. In 2017 it fell to 4.1 billion.

Glencore

In 2015, Glencore produced 1.061 million tonnes of copper. In August 2016, the company posted the lowest profit in their previous five years. Then, in November, their own-sourced copper production decreased by 6 percent as compared to the previous year. What was the reason of the company’s setback? Reduction of African copper volumes.

BHP Billiton

This is another company which experienced a dip in production. In 2014 this Australia-based copper producer produced 1.203 million tonnes and in 2015 it was 1.178 million tonnes. The end of 2016 brought more problems – the company had problems at their Olimpic Dam operation in Australia.

Southern Copper

This is a company owned in 85 percent by Grupo Mexico. They saw a growth in their production in 2015. In 2016 the company produced 900,000 tonnes, which was their new record. The increase in production amounted to 21.1 percent. Unfortunately, the company noted some environmental troubles. In 2014 a toxic leak at their mine contaminated rivers in Northern Mexico.

KGHM Polska Miedz

This Polish company operates in Europe, North and South America. They claim to have 37.5 million of copper ore resources. 563,000 tonnes of copper was their production in 2015, next year brought the a record loss because of the decrease of the copper price. The company suffered mostly because of the impairment charge on their Sierra Gorda operation.

Rio Tinto

The company reported a drop in production in 2015 – from 636,000 tonnes to 555,000 tonnes. But there is good news as well. In May 2015 they finally came to an agreement with the Mongolian government concerning their Oyu Tolgoi mine in Mongolia.

Mining stocks decline after gold price correction

In heavy volumes gold suffered its worst trading day of 2017 on Thursday with the metal coming under pressure from a rise in the US dollar to 2-month highs and a looming interest rate hike in the US” – informed mining.com on the 2 March this year.

What was the result of that situation?


Gold stocks were sold heavily and their value was falling. The major gold miners’ shares were experiencing decline despite gold being still up in value.

Barrick Gold Corp (NYSE:ABX, TSE:ABX) lost 4.6% – 32 million shares which led the world’s first-position gold producer the sixth most active stock on NYSE. Now, Barrick is worth $21.5 in New York – still up a 14%.

Newmont Mining Corp (NYSE:NEM) went through the stumble quite smoothly – 2.4% loss. However, the decline led the company to close below its this year opening levels. In 2017, the company expects to top 5m ounces production and to range between 4.5 and 5.4 million ounces in the next 5 years.

AngloGold Ashanti (NYSE:AU) fell by 4.9% in Thursday trade which resulted in the company’s ADRs worth decrease to $4.3 billion in New York. Now, it is in the black as for now in 2017.

Goldcorp (NYSE:GG TSE:G) noted 4% decline. The company still remains at the level of the two-digit gains. Goldcorp is undergoing the process of rebuilding its portfolio which is necessary after the 17% decrease in production last year.

Kinross Gold (NYSE:KGC, TSX:K) had 4.8% loss and its worth fell to $4.1 billion on the NYSE.

Newcrest Mining Limited (ASX:NCM,OTCMKTS:NCMGY) turned out to lose as much as 5.7%.

South African miner Gold Fields (NYSE:GFI) was in a better situation with its 3.8% decline. Last year, the company noted the steady production at 2.1 million ounces and is still admitting profits. Its market worth is $2.5 billion.

Polyus Gold (MCX:PLZL, ) – world’s lowest cost gold producer from Russia – was affected only slightly in Moscow (here its worth is about RUB1 trillion/$17 billion).

Agnico-Eagle (NYSE:AEM) lost this year’s gains by dropping 3.8%. Its market worth comes to $9.1 billion on the NYSE.

Sibanye Gold (NYSE:SBGL) fell by 4.6% in New York, but it is still trading 9.2%. Last year, the company produced 1.5m ounces and was in the top 10 of gold producers.

Randgold Resources (LON:RSS,NASDAQ:GOLD) declined below 3% on the day. It is considered the best performing large gold miner (17% gain in value and a market worth of $8.4 billion).

Yamana Gold (TSE:YRI), Iamgold Corp (NYSE:IAG) and Eldorado Gold Corp (TSX:ELD) all lost more than 6% which pushed the stocks into negative territory for the year.

Sustainable Investing is profitable

Sustainable Investing is profitable

Have you ever wondered whether your possible returns in SRI are going to be lower just because they are SRI related? Some of us can have such doubts, but the answer to the question is “no”. And now let us try to explain why.

To begin with, here are some facts: investments in SRI (sustainable, responsible and impact) assets are 33% higher than in 2014 (according to US SIF). In other words, $1 of every $4,6 under professional management is invested in SRI. The companies which are better at implementing ESG (environmental, social and governance) approach benefit from high-quality management and good stock performance. The quality, structure and compensation of management, and relations between employees are the main factors deciding about the company’s success.

A crucial ESG factor – corporate governance, tests them. What is more, an active ESG participation shows management teams’ ability to think forward and this helps companies to make use of some long-term opportunities. Consequently, lower costs of capital, higher operational and stock price performance become the reward for the companies which aim at constantly improving ESG actions.

Academic research reviewed 190 high quality academic studies on sustainability and business performance and proved the truth of the theory. According to a research paper by Oxford University from 2014, 90% of the studies showed that sound sustainability standards helped companies lower the cost of capital, and 80% of the studies proved that good sustainability practices have a positive impact on stock performance. 88% of the studies demonstrated that operational performance of companies was positively influenced by implementing ESG practices.

Pepsi can be a good example which proves the theory. What led Pepsi to the stock prices increase? It was the company’s action aimed at water conservation, which brought positive results for both the firm and society. Thanks to the involvement in one of the social issues, Pepsi saved more than $80 million in years 2001-2015.

How about investable SRI funds?

Morgan Stanley conducted a study in 2015 which showed that most of the kinds of sustainable equity mutual funds are overrepresented in the highest quartiles of returns and in the lowest quartiles of volatility. When it comes to the question about some short-term variance between SRI indices and non SRI indices performance, it finds the explanation in the fact that sector allocation of some SRI indices is different when compared to the parent index. It is mostly seen in the cases of those which exclude whole sectors and industries. As it is with KLD 400 Social Index, it is overweight information technology by 6 percent and by 4,6 percent it is underweight financials.

In consequence, discrepancies come out when the two sectors show some performance differentials. Many ESG portfolios experienced huge outperformance in 2015 and then, in 2016 they were systematically going down. What can be the reason of such a scenario? It can be the fact that plenty of ESG portfolios turn out to be underweight energy. On the other hand, since generally ESG practices have a positive impact on businesses, in the long run, ESG criteria bring higher and higher returns.

Mining Stocks

It is rather obvious to the most of people that mining is a huge business. Why not to invest in it? There are some serious environmental issues causing heated discussions in the topic of mining as our planet’s bug enemy, but still it is the important root of many commercial products which often have elements that used to be hidden deep under the ground. In the article below we provide some basic information for those who think of investing in mining.

Two groups of mining stocks

There are two groups of mining stocks –majors and juniors. The group of majors includes the settled companies, with a long history, slow, steady cash flow and stability on the market. These are like huge oil companies. The reserves in such majors are proven which makes them “safe” and easier in terms of investing.

The juniors are, we may say, the opposite of the majors. Thus, you can expect a short history and experience, fluctuating and not high capital and big profits mostly in the sphere of hopes. What can happen in the case of juniors? Starting from the darkest scenario – failure. The consequence is of course unfortunate, and brings the loss for investors and banks. Another scenario is more optimistic. A junior can be successful enough to provide satisfying returns. And the best option: a junior can find a big seam of mineral which is highly desirable in the market and it makes the junior earn a fortune in a very short amount of time as much as a major would gain in years.

The value of junior and major mining stocks

While both juniors and majors are different, they have similar business models. They are based on how much of this useful and valuable material they have under the ground to make money on. The problem is that nobody knows how much is hidden under the earth before it is taken out. That is why, mining stocks’ value is just the result of the market value of the company’s reserves – those with a longer experience and previous successes are valued better. The reserves are estimated by feasibility studies. This kind of study gathers size and grade of the company’s deposit and calculates it with the costs and troubles of its extraction. When the gain is higher than costs, the deposit is considered feasible.

Risky or not?

The biggest risk concerns mainly the juniors. It is the feasibility study which determines the junior company’s value. Junior miners often sell their deposits (or themselves) to large miners and look for another deposit. Thus, it turns out that the juniors are often the “fuel” for the majors. A major provides a more stable option. These are mostly market changes of certain minerals’ values which have the biggest influence on the majors. As a major’s owns many deposits, a single one is not going to change the stock value drastically.

Which option is better?

The answers is not very obvious because it depends on your individual preferences. If you look for something more risky, but probably with more reward, and you have the risk capital to invest, you can choose the junior option. Yet if your investment capital consists of your security money, you would probably prefer something safer, so you can choose the major option. You can still gain some decent reward, but with a lower risk at the same time.

In general, before you start investing look for more detailed information and do some research so that you could invest your money with more awareness and necessary knowledge, and to avoid failures.

You can be a Socially Responsible Investor!

Nowadays, people are more and more aware of the current world’s problems and they appreciate the initiatives which work to solve them and have a good impact on the society. The world’s wellbeing has become our common interest. In such circumstances, also investing turns out to be a good way to show what we care about and what we want to improve. Now, not only the return in the shape of money is the investing motivator, but also the positive impact the investment can have on the world.

Socially Responsible Investing: what is it?

Socially Responsible Investing (SRI) – also known as “sustainable”, “ethical”, “green”, “socially conscious” or “mission” – is the kind of investing which is led by an investor’s belief that something has a good influence on the things he or she cares about. This type of investment can be done in 3 ways:

  1. By ESG investing. It means choosing those companies and governments to invest in, which have environmental, social or governance concerns similar to those of the investor.
  2. By shareholder advocacy. In this case socially responsible investor’s aim is to put pressure on a corporation so that it becomes more socially responsible in its activities. It can be done by dialogues, educating the public, engaging media or filling resolutions for shareholders’ vote.
  3. By community investing. This type of SRI is intensively growing in popularity. Here the capital goes to the communities (both in the U.S. and abroad) which are poorer and cannot usually count on the cooperation with the traditional lending institutions. This kind of investing helps not only in the area of income and investment capital, but also provides community services
    like healthcare or education.

SRI means investing in stocks or bonds of those companies which perform, support or disapprove of certain actions. In order to check whether a company can be considered in the socially responsible investing there are three screening methods:

  1. The negative screen – this could be a fact that company consciously does not invest in a certain sector (for example tobacco).
  2. The positive screen – companies which are engaged in “green” actions (solar/wind power usage).
  3. The restricted screen – since corporations are often diversified, SRI fund managers utilize the restricted screen in filtration.

Investors have proved to be sensitive to the social problems as the popularity of the Socially Responsible Investing has grown by 22% in the last 2 years. If you decide to invest in SRI you have a few options to choose between. The most common are mutual funds. Parnassus, GuideStone Funds, and Calvert are the biggest fund companies. Also Exchange Traded Funds have recently appeared in SRI format and apart from this, you can check Powershares or iShares too. The important thing is to have some theoretical knowledge before investing. One of the sources of some information is surely the internet, there are also a few useful books in the topic, for example “The Complete Idiot’s Guide to Socially Responsible Investing” or “Socially Responsible Investing for Dummies”. But if you definitely do not feel confident enough to do it on your own, you can ask an advisor for a necessary help.

Kroondal Platinum Mine

KEY FEATURES:

Location:

Western Limb of the Bushveld Complex, in the North West Province of South Africa

Comprises:

– Underground mining to a depth of 400 metres via three decline sections – the Central, East and No 3 Shafts
– Construction of fourth decline shaft commenced in January 2005; also opencast mining
– Hot commissioning of new 250,000 ton per month concentrator plant to process additional ore from P&SA commenced in March 2005

Management:

– Dedicated AQP(SA) management team (14 people)
– Mining outsourced: Underground – Cementation Mining; Opencast – MCC; Concentrator operations – Minopex

Production:

– Total production of 324,730 PGM ounces for FY2005; production attributable to AQP(SA) of 162,365 PGM ounces
– At steady state, new concentrator is targeted to more than double annual output at Kroondal to 505,000 PGM ounces per annum by 2006

Life of mine:

To 2016

Refining:

Offtake agreement with Impala Refining Services to 2008; balance of concentrate to be processed by Anglo Platinum as part of P&SA

Number of employees:

1,550 contractors


Conceived in 1996, Kroondal Platinum Mine – Aquarius Platinum’s first and flagship operation – commenced production in August 1999. During 2000, Kroondal expanded its operation by installing a regrind mill and extra float cells in the plant. The production rate was increased by 66%, thereby reducing the life-of-mine to 2008.


This short life was addressed in early 2003 when Aquarius Platinum entered into a Pool and Share Agreement (P&SA) with Anglo Platinum, in terms of which AQP(SA) and Anglo Platinum have shared revenues, costs and capital expenditure from 1 November 2003. By incorporating the Anglo Platinum reserves adjacent to Kroondal into the new mine plan, the transaction has resulted in an extension in the life-of-mine to 2016, and a more than doubling of the production rate.

During FY2005, Kroondal posted record production of 324,730 PGM ounces, of which 162,365 PGM ounces were attributable to AQP(SA).

Background

The capital-intensive small-mine concept developed at Kroondal revolutionised the South African PGM industry. Essentially, the concept incorporates the use of key contractors, highly mechanised mining operations and the outsourcing of high-cost, high-risk smelting and refining operations. As a result, productivity levels at Kroondal rank among the highest in the industry.

A revised life-of-mine development plan for the expanded operation post the P&SA has been completed and approved by the joint Aquarius/Anglo Platinum management committee. Expansion of the underground operations at the Central, East and No 3 shafts to access the Anglo Platinum reserves to the north and east of the current Kroondal infrastructure has progressed well, including the construction of a fourth decline shaft having commenced in January 2005. Over 1,000 metres of down-dip development has been completed to date, with the first ounces produced out of the newly  ommissioned 250,000 ounce per annum concentrator plant in March 2005.


The P&SA will see Kroondal’s production profile increasing from a name plate 240,000 PGM ounces per annum to 505,000 PGM ounces per annum by 2006, at an estimated cost of R750 million in 2003 money terms. It is also envisaged that some 1,000 new job opportunities will be created as a result of the expansion.

Location and geology

Kroondal is located approximately 120 kilometres north-west of Johannesburg, on the Western Limb of the world-renowned Bushveld Complex. The UG2 Reef outcrops on the property and dips to the north at approximately 9 degrees. This orebody comprises two mineralised seams – namely the Main and the Leader Seams – which are separated by a one-metre pyroxenite zone commonly known as the parting.

Mining and processing

Primarily an underground operation, Kroondal employs mechanised bord-and-pillar mining methods. As both the Main and Leader seams are mined together with the parting, Kroondal is a wide-reef operation underground – a practice which translates into an increased resource, improved productivity and improved safety because of the competent hanging wall. Further blasting control creates large waste rocks in the parting zone; a large proportion of these are removed underground in an effort to improve the economics of the operation. A Dense Media Separation (DMS) process in the concentrator plant removes further waste from the ore stream, effectively upgrading mill and flotation speed. Kroondal has a concentrate offtake agreement with Impala Refining Services until early 2008. Thereafter, in accordance with the P&SA, all smelting, refining and marketing of output from Kroondal, including that from the new plant, goes to Anglo Platinum.

Mineral Resources and Ore Reserves as at 30 June 2005

The following Mineral Resources and Ore Reserves have been confirmed in accordance with the Joint Ore Reserves Code (JORC), under the auspices of the Australasian Institute of Mining and Metallurgy.