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Copper Slides on Chilean Miner Averting Strike, Peru’s 100-Year Mine

October 16, 2019 at 18:39 by Andrew Moran

Copper futures are tumbling midweek after a Chilean miner averted a labor strike that would have led to a production stoppage. Prices also took a hit on reports that a new mining project in Peru could produce copper for the next 100 years. But new data highlighting China’s impressive September imports helped limit the damage.

Antofagasta Minerals, one of the world’s biggest copper producers, announced that it reached a new labor agreement with a union at its chief Los Palmbres mine. The deal would see workers receive a wage increase, bonuses, and loan incentives. If its flagship had endured a work stoppage, then it would have slightly helped prices weather the economic storm as the US-China trade spat has affected demand levels.

Anglo American, a British mining firm based in South Africa and England, is investing $5 billion in a copper project in Peru. Tom McCulley, the head of Anglo American in Peru, said during a company presentation that this mine is a “generational asset,” meaning that it has the opportunity to produce the industrial metal for the next 100 years. The

This is not going to be a 30-year mine. My personal opinion is that it is going to be closer to 100 years. It will be a licence to print money for a long period of time.

We know this will continue to get bigger.

Right now, reserves have only been officially defined with a depth of 400 meters, but drill samples suggest it could top 1,000 meters.

According to the General Administration of Customs, China’s copper imports surged to an eight-month high of 10.15% in September. The data show that imports of unwrought copper totaled 445,000 tons last month, up from 404,000 tons in August. But they are still down nearly 15% from the same time a year ago.

The additional data highlight that copper inventories in bonded warehouses plunged to a six-year low of 295,500 tons. This suggests a tighter market amid clampdowns on scrap imports.

That said, investor sentiment is affecting the red metal, mainly out of fear that Beijing and Washington will not be able to pass the first phase of a comprehensive trade agreement. Both sides have already made comments that are terrifying traders: China wants to have another round of negotiations to clarify the first phase and the White House says it will raise tariffs in December if nothing is signed.

In other metal markets, December gold futures rose $8.80, or 0.59%, to $1,492.30 per ounce. November silver futures edged up $0.015, or 0.08%, to $17.40 an ounce. November platinum futures jumped $1.40, or 0.16%, to $890.60 per ounce. November palladium futures soared $35.80, or 2.11%, to $1,732.40 an ounce.

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