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Fri, Jan. 15, 10:34 AM
- Shares in global mining companies face their biggest back-to-back weekly losses in four years after signs of slowing growth in China, plunging oil prices and asset writedowns at BHP Billiton spark a selloff.
- Copper prices hit a six-year low for the fifth time in a week in London, -1.9%, amid worries about China’s economy, and are now down nearly 9% YTD; aluminum, lead, nickel and zinc all fell more than 1%.
- Long-dated “copper prices adjusted for producer country FX are mostly unchanged, which underscores the macro nature of the recent declines,” according to Goldman Sachs.
- "No lasting price recovery appears possible at present, neither on the metal markets nor on the commodities markets in general," Commerzbank says.
- BHP -7.7%, RIO -6.4%, OTCPK:AAUKF -5.7%, VALE -5.5%, FCX -5.4%, OTCPK:GLCNF -4.4%, TCK -4.3%, SCCO -1.1%.
- ETFs: JJC, DBB, JJN, JJU, CPER, JJT, BOM, RJZ, BOS, FOIL, JJM, LD, BDD, NINI, CUPM, LEDD
Dec. 21, 2015, 2:58 PM
- Peru's energy and mines minister says the country's copper output should jump 65% in 2016 to ~2.5M metric tons after the massive Las Bambas project starts operations in February.
- Ongoing talks in communities where protests against Las Bambas turned deadly in September have been positive recently and have not held up the $7.4B project; the mine should produce 250K-300K metric tons of copper in 2016.
- But still-strong local opposition to Southern Copper's (SCCO -1.7%) $1.4B Tia Maria project likely prevent the government from issuing a construction permit for the stalled project, the minister says.
- ETFs: JJC, CPER, CUPM
Oct. 27, 2015, 2:59 PM
- Southern Copper (SCCO -1.3%) says its Q3 net profit fell 70% Y/Y to $98.4M, well below the $170M analyst consensus estimate, amid weak copper prices.
- SCCO says lower copper prices were somewhat offset by an 8.8% Y/Y rise in copper production to 536.6K metric tons in the first nine months of 2015, mainly as a result of the production performance of the Buenavista mine which increased production by the additional production of a new state of the art plant.
- SCCO says it expects to increase production capacity to 1.165M metric tons of copper by 2018.
Sep. 22, 2015, 7:05 PM
- Southern Copper (NYSE:SCCO) CEO Oscar Gonzalez says opposition to the Tia Maria copper project in southern Peru is easing because of its door-to-door campaign in communities where activists halted the project with protests earlier this year.
- SCCO put Tia Maria on hold in May after rallies against it turned violent, but the company has since ramped up efforts to dispel fears the project would pollute surrounding agricultural valleys.
- The CEO says he still hopes to get the $1.4B project back on track this year.
Sep. 19, 2015, 8:25 AM
- Metal and mining stocks have been hit hard in recent months, but analysts at FBR Capital argue that there are still attractive names to own in the sector.
- Companies with exposure to the zinc and met coal markets look appealing, FBR says, as supply reductions could act as a positive catalyst for prices; Teck Resources (NYSE:TCK) is the firm's top pick there, with Horsehead Holding (NASDAQ:ZINC) the favorite small-cap idea.
- The firm sees "no structural turnaround for domestic thermal coal," but thinks the rate of decline will begin to slow next year, justifying Outperform ratings on Alliance Resource Partners (NASDAQ:ARLP) and Westmoreland Coal (NASDAQ:WLB); Cloud Peak Energy (NYSE:CLD) and Joy Global (NYSE:JOY) are rated Underperform.
- FBR is fairly upbeat on steel names, initiating SunCoke Energy (NYSE:SXC) and SunCoke Partners (NYSE:SXCP) at Outperform, as SunCoke’s long-lived coke assets are able to generate strong margins “in almost any U.S. steel environment"; Cliffs Natural Resources (NYSE:CLF) is rated Market Perform.
- The copper market will remain in surplus through 2017, FBR says, but it rates Southern Copper (NYSE:SCCO) at Outperform; Freeport McMoRan (NYSE:FCX) is rated Market Perform.
- Among precious metals miners, the firm prefers Pan American Silver (NASDAQ:PAAS) and Royal Gold (NASDAQ:RGLD), the latter "a diversified company with a solid balance sheet and attractive acquisition opportunities."
Aug. 31, 2015, 11:25 AM
- Southern Copper (SCCO -2.2%) is downgraded to Neutral from Overweight with a $31.50 price target, cut from $37, at J.P. Morgan, which cuts its 2016 estimates for nickel by 53% to $8,750/ton and for copper by 30% to $4,400/ton because of persistently weaker commodity demand.
- While SCCO has growth potential, given its several brownfield and greenfield projects, the firm thinks investors could get exposure to the same copper growth story at more reasonable prices through its parent company, Grupo Mexico (OTCPK:GMBXF).
Aug. 11, 2015, 11:35 AM
- Commodity metals are getting hammered by China's devaluation, with aluminum trading down nearly 2%, copper prices lower by 2.5% and nickel plunging more than 3.5%.
- Hardest hit of the mining stocks is Freeport McMoRan (FCX -14.1%), which has completely surrendered yesterday's 10.8% surge; shares now are down 72% over the past year and 57% YTD.
- Iron ore miners are sharply lower: BHP -5.5%, RIO -4.2%, VALE -7.8%, CLF -7.3%.
- Steel companies: X -9.7%, MT -5.1%, AKS -5.7%, NUE -2.9%, STLD -3.5%, CMC -4%.
- Also: AA -6%, CENX -4.9%, TCK -8.2%, SCCO -4.9%.
- ETFs: XLB, JJC, XME, SLX, PEO, VAW, COPX, DBB, UYM, CU, IYM, JJN, SMN, JJU, PICK, MATL, CPER, JJT, BOM, RJZ, FXZ, PYZ, BOS, FOIL, JJM, LD, BDD
Jul. 29, 2015, 10:39 AM
- Southern Copper (SCCO +1.1%) says its H1 net income fell 12.6% to $577.1M from $660.6M in the year-ago period due to the slump in global metal prices, but it says it is well-positioned to weather the downturn.
- SCCO's H1 sales fell 6.5% to $2.658B compared with the same period in 2014, as a higher sales volume was unable to offset lower prices, and production rose 8.6% to 356.7K metric tons; H1 EBITDA declined 13.3% to $1.19B.
- SCCO says its reserve base, low cash cost, conservative capital structure and growth program makes it "the industry's best prepared company to weather this temporary downturn in metal prices."
Jul. 7, 2015, 10:23 AM
- Freeport McMoRan (FCX -7.3%) is the S&P 500's worst performer in early trading as copper prices retreat to five-month lows.
- Other global miners of copper, iron ore and other metals also are posting sharp losses: VALE -6.1%, BHP -3.8%, RIO -3.9%, SCCO -4.4%, TCK -6.4%.
- China’s stock market swoon is magnifying investor fears about weaker demand from one of the world’s largest consumers of raw materials.
- Overnight, the S&P, Goldman Sachs and the Bloomberg commodity indexes fell the most since November, and analysts say the worst is yet to come.
- "China's demand stumble comes at an awkward time, just when more and more supply of raw materials is coming on stream in many sectors. No quick fix in sight," says HSBC co-head of Asian economic research Frederic Neumann.
- ETFs: JJC, CPER, CUPM
May 26, 2015, 12:24 PM
- Peru's government over the weekend instituted a 60-day state of emergency in a region roiled by deadly protests against Southern Copper's (SCCO -1.5%) stalled $1.4B Tia Maria project.
- The state of emergency in nine districts in the southern region of Arequipa suspends civil liberties, allowing police and troops to enforce curfews and order an end to two months of protests that led SCCO to place the project on hold last week.
- The announcement followed the death of a fourth person in clashes between protesters and police as Tia Maria opponents pushed to cancel the proposed 120K metric tons/year copper mine.
May 16, 2015, 11:55 AM
- Souther Copper (NYSE:SCCO) says it is temporarily suspending development of its $1.4B Tia Maria copper project in Peru following almost two months of increasingly violent protests.
- SCCO President Oscar Gonzalez said late yesterday that the miner would "pause" operations for 60 days to resolve the concerns of residents.
- Earlier in the day, Peru's president, Ollanta Humala, said canceling the project would expose the country to lawsuits and make it less attractive to investors.
May 15, 2015, 7:59 AM
- Peru's government says it is investigating whether Southern Copper (NYSE:SCCO) knew about but failed to report an extortion attempt by an opponent of its stalled Tia Maria project.
- The inquiry comes as the judiciary issued an arrest warrant for a major opponent of the $1.4B proposed mine who allegedly tried to extort money from Southern Copper in exchange for calling off protests against the mine that have turned violent and left three people dead this year.
- The government says it stopped talks with SCCO over how to start construction on Tia Maria because of the accusations and may take further action.
May 8, 2015, 3:37 PM
- Peru's government sends an additional ~2,000 police to the Islay province as continuing protests against Southern Copper’s (SCCO +0.8%) Tia Maria mine project spreads to more towns.
- More than six weeks of protests - some violent - have left ~250 police and civilians injured, with two deaths in the past two weeks.
- SCCO’s plans to build the $1.4B mine in the mountains above Islay’s Tambo Valley are opposed by locals concerned that water and air pollution will cause crop damage.
May 5, 2015, 6:59 PM
- Continuing protests against Southern Copper's (NYSE:SCCO) proposed Tia Maria copper mine have left another protester dead - the second death in two weeks - and two more wounded.
- Peru's interior minister says he had ordered police not to use lethal weapons, and replaced local law enforcement chiefs after the first fatality, caused by a bullet wound.
- Talks between the government and local officials over the fate of the $1.4B mining project broke down more than two weeks ago and have not resumed.
- Tia Maria has the potential to add 120K metric tons of copper to SCCO's annual supply, but the project has been stalled since three people died in similar rallies in 2011.
Apr. 28, 2015, 3:45 PM
- Southern Copper (SCCO +3.1%) says local protests against its $1.4B Tia Maria project in Peru might delay its scheduled rollout in 2017.
- SCCO had been expecting a construction permit for the proposed copper mine when rallies calling for its cancellation broke out a month ago, and CFO Raul Jacob says it should receive the permit if government talks under way with local opponents ease tensions.
- Farmers in the southern region of Arequipa are continuing their protests against Tia Maria today after a protester was killed in clashes with police last week.
Apr. 24, 2015, 3:38 PM
- Southern Copper (SCCO +2.7%) reports Q1 earnings of $0.35/share, beating the analyst consensus estimate of $0.29, on revenues that fell 6% Y/Y to $1.27B, below the $1.32B consensus, as copper prices fell.
- Q1 EBITDA declined 16.9% Y/Y to $556.1M, and margin fell from 49.4% to 43.6%.
- SCCO's Q1 copper production rose 8.9% Y/Y to 177.6K tons, and says it expects its copper output to nearly double to 1.15M tons in 2017 from last year.
- Separately, Peru's energy and mines minister says the government could ask SCCO to make additional changes to its $1.4B Tia Maria project after protests turned deadly this week.
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