• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 1 min Oil prices going Up? NO!
  • 1 day Could Venezuela become a net oil importer?
  • 4 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 14 mins Tesla Closing a Dozen Solar Facilities in Nine States
  • 2 hours Could oil demand collapse rapidly? Yup, sure could.
  • 1 day Gazprom Exports to EU Hit Record
  • 1 day EU Leaders Set To Prolong Russia Sanctions Again
  • 36 mins Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 2 hours Oil prices going down
  • 1 day Why is permian oil "locked in" when refineries abound?
  • 1 day Oil Buyers Club
  • 1 day EVs Could Help Coal Demand
  • 17 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 43 mins Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 28 mins Saudi Arabia turns to solar
  • 1 day China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Profitable Once Again: Copper Miners Report Better Numbers

Escondida mine

It’s a big day for copper. With workers at Escondida, Chile — the world’s largest mine – having signaled they intend to start strike action today, earlier than expected.

That would likely mean upward pressure on prices. Which could be very good news for copper miners, especially in light of new research this week – which shows production costs are falling exceptionally fast in the global copper sector.

That work comes from metals industry experts CRU Group. Who released a study Tuesday detailing production costs at copper mines around the world over the past year.

CRU’s analysis found that the average cash cost of production for the global copper sector fell a full 13% during 2016. To near $2.40/lb, from just under $2.80/lb in 2015.

The chart below from the research summary shows how costs have plunged recently (red lines).

(Click to enlarge)

CRU Group’s new analysis shows copper production costs (red lines) fell markedly during 2016

Costs have actually been falling across the copper industry since 2013. But 2016 was by far the strongest drop we’ve seen the last three years—–representing the fastest annual rate of decline seen in 25 years.

The majority of the big cost savings in 2016 came from lower prices for mine consumables, as well as lower labor rates. A consequence of continued deflationary pressure in the mining sector, as prices have dropped and projects have been cut back or shelved. Related: The Unlikely Alliance Between Trump And Saudi Arabia

In fact, the falling cost structure is giving the copper sector newfound profitability, even at today’s lower copper prices. With CRU reporting that 89 percent of the global copper mining sector was cash flow-positive at 2016’s average price of $2.20/lb.

And with prices rising the last few months, the outlook is even better. Using the December 2016 average price of $2.57/lb, over 93 percent of global copper mines were making money.

That’s good news for mining companies and their investors. Watch for rebounding profits at copper mines, potentially leading to share price rebounds in this sector.

Here’s to getting back to business.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News