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.

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.

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.