Unlike many of the fashionable critical minerals fuelling the current boom, copper has been around for a long time, and the list of things it's used for is only growing as an avalanche of new technologies descends.
The market for the malleable, ductile metal is poised for a shake-up in the coming years. Fitch Solutions anticipates a gradual increase in copper prices year on year. In 2024, copper is expected to reach $9,100 per tonne, reflecting sustained demand and evolving market dynamics.
Analysts say the trajectory is expected to continue into the following year when we can expect to see copper prices rise to $9,400 per tonne. By 2031, there is a possibility that copper prices could reach $11,500 per tonne.
While various new technologies will keep the demand for copper on the boil, the International Copper Study Group (ICSG) predicts a significant shift in copper supply dynamics. It projects that the copper market will transition from a supply-demand balance in 2023 to a substantial supply surplus in the following year.
According to the latest projections, production is anticipated to surpass usage by 467,000 tonnes in 2024.
While the ICSG still anticipates a deficit in the copper market for the current year, the previously forecasted surplus has been revised downward.
Supply and demand equation
These developments highlight the challenges and opportunities that lie ahead for copper. The market's current dynamics are influenced by Western demand weakness, particularly in the EU countries and North America, offset by strength in China, where apparent usage is forecasted to grow by 4.3% this year.
Despite acknowledging the changing global economic outlook, the ICSG maintains a relatively optimistic stance for the next year. It has only slightly adjusted its 2024 global usage growth forecast, citing expectations of improved manufacturing activity, ongoing energy transition and the development of new capacity in various countries as supporting factors.
This said the expected growth in usage in 2024 is overshadowed by a projected 4.6% surge in global refined copper production. This production increase is already underway, driven primarily by China's expansion of smelting and refining capacity.
The shift in copper market dynamics will put pressure on copper prices, which recently broke down through the $8,000-per metric ton level.
While copper holds promise in the energy transition, the current focus is on the balance between supply and demand, which will influence market sentiment. Interesting times ahead.
Challenges to supply still predicted
Despite the projection of increased supply from various copper projects worldwide, challenges to supply persist, including labour strikes and community opposition in key mining regions like Chile and Peru.
Moreover, rising inflation is driving up the costs of raw materials and labour required for project development, posing threats to expansion initiatives.
Copper small caps busy in the last quarter
Australian copper exploration is healthy, with several ASX-listers making gains in the September quarter. Here is a cross-section of what they achieved.
Australian Gold and Copper
During the September quarter, Australian Gold and Copper Ltd (ASX:AGC) secured a game-changing $10.1 million strategic investment from Delin Mining Group Cooperation Ltd. This capital infusion, subject to shareholder approval, will strengthen AGC's financial position and support its ongoing exploration activities.
The company also prepared drill pads at the Hilltop target in the Cobar Basin of NSW, poised for immediate use once the Delin transaction is finalised.
Over the three-month period, AGC made progress in its exploration endeavours. The focus remains on the South Cobar Project, a region rich in copper, gold, silver, lead and zinc.
Extensive induced polarisation (IP) geophysical surveys have picked out five promising drill targets, with Hilltop being the highest priority due to its surface expression and high-grade gold findings.
Future drilling is planned at four additional IP chargeability anomalies at Achilles and Planet to the north. AGC also conducted field mapping and soil sampling with auger drilling over the southern Achilles IP target, enhancing drill planning and confidence.
Cobre
Cobre Ltd (ASX:CBE) dedicated its exploration efforts in the September quarter to the Kitlanya West Project (KITW) in Botswana, where an extensive 12,000-metre reverse circulation (RC) and aircore drilling program was wrapped up.
This initiative aimed to gather crucial lithological data beneath the surface cover and investigate soil sample anomalies identified during regional soil sampling. Initial findings have been highly promising, revealing a substantial copper anomaly encompassing zinc and lead in the Tlou fold target, extending over 2 kilometres.
Ground magnetic data over the target indicate similarities to Sandfire Resources Ltd’s T3 deposit. Geological modelling based on diamond drill results from the neighbouring Ngami Copper Project underscores the project's substantial size and scale, with significant unexplored potential and some 32 million ounces of silver credits associated with the exploration target model.
Cobre is also exploring the viability of an in-situ copper recovery (ISCR) process at NCP, which has shown promise in hydrogeological assessments and metallurgical tests, yielding noteworthy copper recoveries, including silver credits.
Cooper Metals
During the September 2023 quarter, Cooper Metals Ltd (ASX:CPM) directed its exploration efforts at the Mt Isa East Copper-Gold Project in Queensland, with promising results.
At King Solomon 1 prospect, all four diamond drill holes pointed to visual sulphide mineralisation, with 23MEDH002 confirming the presence of semi-massive sulphides within a strongly mineralised breccia zone in the central plunging copper-gold shoot.
Geochemical sampling was conducted on five key copper-gold prospects, including Mafic Sweats South, Brumby Ridge, Long Slot, Raven and Yarraman, all within a 10-kilometre radius. These efforts defined targets for initial RC drill testing, scheduled to commence in October.
Long Slot workings, looking north.
At the Raven copper-gold prospect, geochemical sampling delineated a mineralised trend extending over around 300 metres, reinforcing the significance of the VTEM anomaly coinciding with the discovery gossan announced in July.
Cooper also expanded its strategic presence by acquiring tenements EPM19686 and EPM28905 near the Eloise Copper-Gold mine in the highly prospective eastern province of the Mt Isa Inlier.
Cyprium Metals
Cyprium Metals Ltd (ASX:CYM, OTC:CYPMF)'s primary focus in the September 2023 quarter was to relaunch the Nifty operations with a reduced capital requirement and lower risk profile. This strategy involves the development of a large-scale open-pit mine, leveraging existing sunk capital infrastructure.
The company successfully completed a $24 million placement to sophisticated and institutional investors and closed an oversubscribed $5 million entitlement offer, raising an additional $7.6 million.
This financial support from a range of investors underscores strong endorsement for Cyprium's vision to reopen the Nifty operation as a long-term, large-scale open-pit mine.
In addition to financial developments, Clive Donner, an experienced mining industry executive, was appointed as managing director, and leading private equity firm Pacific Road Capital Management (PRCM) now holds a 17% interest in the company, with Matt Fifield, managing director of PRCM, joining the board as interim chair.
“The company is now adequately funded to progress the technical studies necessary to build an integrated mining development plan that encompasses both the oxide and substantial sulphide resources at Nifty,” Donner said.
“The company anticipates being able to release a feasibility study during the first half of calendar 2024. Through this additional work, we expect to demonstrate a significantly larger scale and longer life project than the previous Oxide Restart Project alone.”
Moreover, the company regained its official quotation status on the ASX, following the satisfaction of specific conditions for reinstatement.
Emmerson Resources
Emmerson Resources Ltd (ASX:ERM), which holds a 100% stake in the Tennant Creek project in the Northern Territory, made strides towards uncovering mineral potential in the region during the quarter.
Extensional drilling at the Hermitage prospect revealed the presence of extensive and noteworthy copper and gold mineralisation. Drilling results included:
- 20 metres at 1.5% copper, 0.6 g/t gold, 7,245 parts per million (ppm) (0.7%) bismuth, 9.6 g/t silver and 497 ppm cobalt. This interval notably featured 7 metres at 2.2% copper, 1.0 g/t gold, 19.7 g/t silver, 12,040 ppm (1.2%) bismuth and 435 ppm cobalt;
- 34.8 metres at 1.0% copper and 918 ppm cobalt from 147.2 metres;
- 51.1 metres at 0.8% copper and 1,113 ppm (0.11%) cobalt from 99 metres;
- 11 metres at 4.1 g/t gold from 158 metres, with a subsection of 5 metres at 8.5 g/t gold; and
- 9.6 metres at 1.2% copper and 0.9 g/t gold from 227 metres.
This mineralisation was encountered beneath a late-stage low-angle fault, significantly expanding the deposit at depth. Furthermore, the mineralisation remains open for further exploration down plunge to the west, up plunge to the east, and at depth, highlighting the exciting exploration potential.
In the corporate realm, Emmerson Exploration maintains a robust financial position, boasting $4.9 million in cash reserves as of September 30, 2023. This financial strength positions the company well to continue its exploration activities and unlock the mineral riches of the Tennant Creek project.
Emmerson managing director Mike Dunbar said: “The Tennant Creek project was the focus for exploration during the quarter, with extensional drilling completed at Hermitage and more recently follow-up RC drilling underway at the high-grade Golden Forty Prospect as well.
“The Hermitage drilling intersected significant and wide zones of copper and gold mineralisation in 8 of the 11 holes completed, with significant amounts of by-products also intersected including 1.2% bismuth, 19.7 g/t silver and up to 0.19% cobalt. These grades coupled with copper grades up to 2.5% and gold grades up to 8.45 g/t, highlight the potential of the mineral system.”
Legend Mining
During the September quarter, Legend Mining Ltd (ASX:LEG) made gains at the Octagonal prospect, completing a four-hole diamond drilling program, covering a total of 5,537.5 metres.
The program followed two holes drilled in the previous quarter. A noteworthy discovery came from hole OCDD004 in the form of nickel-copper sulphide deposits accompanied by DHTEM conductors. As drilling depth increased, the nickel tenor displayed encouraging signs.
Legend is capitalising on this momentum by conducting an additional High Power Fixed Loop Electro Magnetic (HPFLTEM) survey at the prospect. The survey has been designed to identify conductive bodies situated below a depth of 600 metres from the surface.
The forthcoming results, combined with the integration of seismic and other data sources, are anticipated to generate a new batch of diamond drilling targets at the prospect.
In other news, the company continues to focus on comprehensive analysis of the Mawson seismic reprocessing and regional MLTEM surveys, which it hopes will gain it a deeper understanding of the prospect's potential.
The company is in a strong financial position, boasting cash reserves of $12.9 million as of September 30.
During the September 2023 quarter, the joint venture with IGO Ltd reported significant fieldwork progress on its tenements, including the completion of eight aircore drill holes covering a distance of 238 metres at the Waddy Central target and the finalisation of three MLTEM targets – Cullen West, Caldwell East and Caldwell West.
Orion Minerals
Orion Minerals Ltd (ASX:ORN, JSE:ORN) is in the midst of a pivotal transition towards becoming a mine developer and operator at the Prieska Copper Zinc Mine (PCZM). Key milestones achieved during this transition include the recruitment and onboarding of a skilled operating team, detailed designs for the trial mining program, and the installation of primary infrastructure upgrades—all progressing according to plan.
Orion reported an updated PCZM +105 mineral resource, increasing the resource to 2.3 million tonnes at 1.7% copper and 1.6% zinc. This update also included an indicated resource of 1.9 million tonnes at 1.82% copper and 1.70% zinc, elevating the total PCZM mineral resource to 31 million tonnes grading 1.2% copper and 3.6% zinc.
The company initiated the drawdown of project development funding, amounting to some $13.8 million in July 2023, from facilities totalling ZAR370 million. It awarded a trial mining contract to the South African contract mining company, Newrak Mining Group, which will operate with a fleet of conventional load, haul and dump loaders and a continuous loading machine.
The installation of the main 178-metre rising main dewatering pipe has been completed, with primary dewatering expected to commence in early 2024 following the commissioning of the primary 15MW electrical power supply.
Orion is actively working on an updated feasibility study focused on the accelerated development strategy and staged ramp-up at Prieska, set to be completed by mid-2024, following the trial mining phase. Additionally, it has upgraded mineral resources at the Flat Mines area at the Okiep Copper Project (OCP), which contributes to a positive outlook for the project.
Orion's commitment to community involvement in its projects, especially its Community Participation Framework at PCZM, earned the company the AAMEG Emerging ESG Leader Award.
QMines
QMines Ltd (ASX:QML) reported a series of activities during the September quarter, during which it acquired the Develin Creek project, leading to a fifth mineral resource estimate. The company’s exploration efforts resulted in a maiden copper and zinc discovery at the Artillery Road prospect, with significant intersections achieved in drilling operations.
Drilling at Mt Chalmers Southwest picked out a new semi-massive sulphide body, with intersections including:
- 67 metres at 2.31% copper equivalent (CuEq) from 45 metres including 36 metres at 3.81% from 45 metres;
- 31 metres at 0.96% CuEq from 79 metres including 5 metres at 3.9% from 79 metres; and
- 16 metres at 0.93% CuEq from 104 metres including 7 metres at 1.59% from 105 metres.
The company has been actively engaging with third parties to explore potential corporate, offtake, royalty and cornerstone investment arrangements. It is preparing a data room for interested parties and has received strong interest, although no formal offers have been received yet.
During the quarter, QMines has also been proactive in its engagement with the industry and investors. The company participated in various conferences and investor events, including the Diggers and Dealers mining conference in Kalgoorlie and the Spark+ and 121 investor conferences in Singapore. Additionally, it held investor events in Melbourne, Sydney, and Brisbane, and organised a site trip to Mt Chalmers.
QMines also successfully completed a capital raising of $3 million through a placement of shares at $0.11 per share, which it says demonstrated strong demand from investors.
Castillo Copper
Castillo Copper Ltd (ASX:CCZ, LSE:CCZ)’s quarterly report showcased notable developments in its various projects.
The company is actively involved in four key properties, including the NWQ Copper Project in Queensland's copper belt, the BHA Project near Broken Hill's renowned silver-zinc-lead deposit in New South Wales, the historical Cangai Copper Mine in NSW, and several assets in Zambia's copper belt.
In late July, CCZ's geology team collaborated with a specialist geological consultancy to produce an updated mineral resource estimate (MRE) for the Cangai Copper Mine. It records 4.4 million tonnes at 2.5% Cu inferred in situ and 0.2 million tonnes at 1.35% copper indicated from historical stockpiles, equating to some 114,000 tonnes of contained copper metal. The resource is further enriched with zinc, gold and silver credits.
The Cangai Copper Mine starts at surface and the full extent of the underlying orebody remains undetermined, with open potential to the east, southeast, and down dip. The company also reports sizable downhole electromagnetic (DHEM) conductors, which points to the possibility of extending known mineralisation along strike.
In a post-review period move, CCZ appointed Jack Sedgwick as interim executive director. Sedgwick's mandate is to conduct an asset review of the current portfolio, redefine priorities and update the group's strategic direction.