Metals & Mining Monitor | Thermal Coal Prices Rise to Three-Month High; BHP Explores Sale of Brazilian Gold and Copper Mines

Moomoo News AU wrote a column · Aug 12 15:57

Metals & Mining Monitor | Thermal Coal Prices Rise to Three-Month High; BHP Explores Sale of Brazilian Gold and Copper Mines

Hello mooers! Check out the latest market dynamics of the metals and mining industry over the past week.
•Base metals: Copper prices decline by 1.9% in a week
•Energy metals: Li carbonate prices drop to three-year low
•Precious metals: Gold prices fell by 1.7% in the past week
•Bulk commodities: Thermal coal prices rise to three-month high

Spot Price Snapshot

Key Price Moves

As of August 9th, the spot price for Newcastle thermal coal closed at $146.50 per ton, continuing its upward trajectory with a weekly increase of 4% and a monthly surge of 10.3%, achieving and sustaining the highest level in over three months. The recent uptick in coal prices is attributed to the strengthened outlook for a rise in global coal demand by year's end. The International Energy Agency (IEA) has noted that despite the rapid expansion of renewable energy sources, the significant growth in electricity demand from major economies indicates that global coal consumption is expected to remain relatively stable this year and the next.

Market analysts highlight that increased demand from Europe has also bolstered coal prices. Coal prices in Europe have escalated in tandem with natural gas prices, which have witnessed a 16% increase over the past month.

Meanwhile, China, the world's largest importer of coal, has continued to dramatically boost its imports. Following a record high in the first half of the year, coal import volumes in July maintained a year-on-year and month-on-month growth trend, with an even larger margin of increase.

According to IEA projections, global coal consumption in the second half of 2024 (24H2) may decline compared to the first half, while production could see an increase. Consequently, the upward flexibility of international coal prices may still be somewhat limited.

The price of lithium carbonate has plummeted below 80,000 yuan per ton ($11,893 per ton), marking the lowest level in over three years, as concerns over an oversupply intensify. Lithium miners and producers continue to expand their capacities and seek out new reserves, with market participants expecting a near 50% surge in global supply this year. The oversupply situation is further exacerbated by government subsidies to companies across the entire supply chain, leading to a battery surplus. In addition, hopes for a market equilibrium have prompted Chile to signal its intention to double its output over the next decade.

Adding to the bearish pressure, the European Union has initiated tariffs of up to 38% on Chinese electric vehicle manufacturers starting this week, in response to subsidized dumping. Together with comprehensive tariffs from the United States—which has quadrupled its tariffs on Chinese electric vehicles to 100%—the measures have impacted the input materials for battery producers. Consequently, China's exports of new energy vehicles experienced a month-on-month decline of 15% in June.

Top Company News

BHP Explores Sales of Brazilian Gold and Copper Mines

$BHP Group Ltd (BHP.AU)$ is contemplating the divestiture of its gold and copper mining operations in Brazil. These assets became a part of the company's portfolio following the acquisition of OZ Minerals in 2023. Sources close to the matter have revealed that BHP is in discussions with the prominent financial institution, Banco Santander S.A., seeking advisory services to assist in the prospective transaction. This move comes after a strategic evaluation of the assets in question.

Rio Tinto Initiates Exploration Program at Canada's Legacy Lithium Project

Rio Tinto Exploration Canada (RTEC), an affiliate of the global mining giant $Rio Tinto Ltd (RIO.AU)$, has commenced its preliminary exploration activities at the Legacy Lithium Project, owned by Saga Metals, located in Quebec's James Bay region. The initial stages of exploration have been set in motion, paving the way for an upcoming airborne survey, which will employ both magnetics and radiometrics. This survey is scheduled to commence on the 11th of August, 2024. Building upon this groundwork, RTEC is slated to resume field operations on the 9th of September, with a strategic focus on Area 1. This particular zone lies in proximity to established spodumene-pegmatite occurrences and represents a territory that has not been previously explored.

IGO and Medallion Metals Forge Exclusive Negotiation Terms for Forrestania Nickel Operation Assets

$Medallion Metals Ltd (MM8.AU)$ has secured an exclusivity agreement with industry peer $IGO Ltd (IGO.AU)$, setting the stage for potential acquisition talks surrounding key assets of the Forrestania nickel operation located in Western Australia. This agreement grants Medallion Metals a nine-month exclusivity period—with an option to extend by an additional three months—to conduct negotiations focused on the Cosmic Boy processing plant and its related infrastructure, once IGO concludes nickel processing activities. The arrangement underscores both companies' commitment to exploring strategic opportunities within the Forrestania nickel project ambit.

Tertiary Minerals Partners with First Quantum for Zambian Copper Venture

Tertiary Minerals has announced that its subsidiary, Copernicus Minerals, is poised to potentially form a joint venture with $First Quantum Minerals Ltd (FM.CA)$ for the advancement of the Mukai copper project situated in Zambia. According to the terms laid out in a binding letter of agreement, Tertiary Minerals will provide First Quantum with a two-year period dedicated to exploration due diligence. During this phase, First Quantum is obligated to allocate a minimum of $1.5 million toward the project's exploration efforts. Following the completion of this phase, First Quantum may proceed to secure an initial 51% interest through earn-in and joint venture agreements, with the option to increase this interest to 80% over the subsequent two years.