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Copper prices are on surge amid respite sign in U.S-China trade war and an increase in demand for electricity storage battery due to rapid electrification in the transportation industry.
Several market players including major investment banks are keeping a bullish eye on copper. The increase in copper demand combined with falling inventories of copper is supporting copper prices, and the commodity is on a surge. The on-going resolution between U.S-China to end a long-standing trade war is building optimism among investors for betterment in the global economy. Copper as a basic building block for any economy due to its wide applications from construction to electrification, acts as a backbone for an economy, and thus any sign of betterment in the global economy leads to a price surge in it.
In the event of high prices, mining companies are all set to leap forward in terms of higher production and continuous exploration to identify new reserves. Chile and Peru are among the top producers of the red metal; however, Australia is also in the race and is currently holding the fifth position.
How are Copper miners performing on ASX?
Oz Mineral Limited (ASX: OZL) recently presented its 2018 Fourth Quarter report after meeting production expectations in Prominent Hill and Antas in Q3 2018.
As per the company report, the prominent hill copper production exceeded 2018 production guidance. The company produced a total of 115,998 tonnes of copper in the financial year 2018 (in line with the FY18 guidance of 106,000 tonnes â 116,500 tonnes). The All-in-sustaining cost (AISC) for the Q4 decreased to 108c/lb from 115c/lb in Q3, and the total AISC reached to 118c/lb for the financial year 2018.
The underground mine produced 765kt of ore at 1.98% copper in Q4, and the underground ore reserve growth extended the mine life to 2030 with a 50% increase in Proved ore reserves.
The AISC guidance for the prominent hill is in the range of USD 110-120c/lb with copper production guidance of 95000-105,000 tonnes for FY19.
With various other projects and reserve in line, the company can leap in the environment of high copper prices. However, the benefit of the price rise will depend upon various factors such as if the company reach high production and lost cost environment as mentioned in the guidance and the outcomes of various reserve exploration taken by the company.
During the time of writing this report (25 February 2019), the stock of the company closed at A$10.840, up by 2.36%. The stock has generated an impressive YTD return of 22.71% to date.
DGR Global Limited (ASX:DGR) recently announced about a copper Molybdenum discovery at its Calgoa project. Auburn Resources, a 49% owned subsidiary of DGR, drilled its first whole holes into the 100% owned Calgoa project, located in 50kms north-west of Gympie, Queensland.
The workings returned 156 meters @ 0.24% copper, and a water supply percussion hole intersected a supergene enriched 26m @ 0.48% copper from 10m. As the company continues to focus on new project generation and expanding exploration, it has position itself to take the benefit of high commodity prices. However, the success will depend upon the outcomes from the various projects the company currently holds.
During the time of writing this report (25 February 2019), the stock of the company closed at A$0.125, flat as compared to its previous close. The stock has exhibited an upward trend over past six months, soaring by 42.05%.
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