In the medium to long term, the fundamental outlook for copper is among the strongest of all metals, says diversified natural resources producer Eurasian Resources Group (ERG), which has copper assets in the Democratic Republic of Congo (DRC).
“The lack of major copper plants due on stream, growing demand from the clean energy sector and major infrastructure projects, notably China’s Belt and Road Initiative [a development strategy launched by the Chinese government with the intention of promoting economic cooperation among countries along the proposed belt and road routes] to expand economic activity westward, should propel copper onto a path of substantial market deficits in the years to come, causing prices to rise,” predicts ERG CEO Benedikt Sobotka.
In a statement on the outlook for base metals in November, he explains that copper cathode stocks in China are at the lowest level in almost a year and scrap supply is tightening, meaning that any supply shocks could trigger surprise price hikes. The Chinese government’s efforts to tackle pollution will undoubtedly continue in 2018, Sobotka highlights, and are likely to restrict scrap supply further as the country prepares to enforce the partial ban on scrap imports.
The cornerstone of ERG’s copper business in Africa, as well as its flagship mine in the DRC, the Frontier mine delivered more than 107 000 t contained copper in concentrate in 2016, an increase of 35% on its 2015 output.
A revised production plan was launched by ERG in late 2015 to increase long-term copper production at Frontier by improving the efficiency and effectiveness of its operating model.
“Our team saw the increased production potential of Frontier and, together with the group, production increases have been achieved sustainably, putting long-term durable solutions in place to enable the plant to produce copper concentrate at a highly competitive cost and move the group further towards becoming a first-quartile producer on the industry cost curve,” emphasises Frontier mine GM John Robertson.
He says the production figures at Frontier are “very encouraging” and is proud of what the team has achieved. “This is a major step forward for the group and supports ERG Africa’s strategy to become a regional copper and cobalt champion. Our people are ERG’s greatest asset and their ability to plan, embrace change and deliver solid results is commendable.”
“The achievements at Frontier mine play a key part in forming a balanced production system alongside ERG’s copper and cobalt asset portfolio in Africa, which also includes Boss Mining, Comide, Chambishi Metals and the Roan Tailings Reclamation (RTR) project,” Robertson adds.
The company notes that the growth was the outcome of considerable operational improvements and investment, while the mine also changed the way it deployed contractors. Major benefits were realised from the second quarter of 2016 onwards, resulting in a steady supply of copper ore, improved plant feed grades and plant throughput tonnages.
Global Battery Alliance Initiative
A further development has seen ERG and representatives from international businesses and organisations officially launch the Global Battery Alliance in September to ensure that there is an ethical and sustainable global supply chain for the metals in lithium-ion batteries that help power the Fourth Industrial Revolution and a low carbon economy, through electric vehicles, renewable-energy technologies and smartphones.
“We want to ensure that everyone benefits from the growing demand for alternative energy. It is vital that future energy supplies include ethically sourced storage solutions.
“Unfortunately, there is almost a 100% chance that your smartphone or electric vehicle contains cobalt that comes from child workers in artisanal mines. “Although creating new ethical energy sources will help, we all need to do whatever we can to put an end to child labour. The alliance has a critical role to play in achieving this objective,” Sobotka states.
By the end of 2018, RTR will start supplying the market with 14 000 t/y of ethical cobalt, which will be enough to build up to 1.5-million high-end electric vehicles. “We will ensure that no children have been involved in the production of cobalt at RTR,” stresses Sobotka.