OZ Minerals (ASX:OZL) and Lynas (ASX:LYC) Shine with Productive December Quarter

Summary

  • A significant upsurge in demand has been observed for copper and rare earth metals amid strong Chinese demand and the global shift toward renewable energy and electric vehicles.
  • OZ Minerals registered the copper production of 28,939 tonnes in Q4 2020.
  • Lynas Rare reported the highest ever sales revenue of $119.4 million for the December quarter.

Image Source - ©Kalkine Group 2020

The COVID-19 outbreak led various commodities to fall substantially due to demand shock from the pandemic restrictions. The prices of copper fell to US$4,617 a tonne at the London Metal Exchange (LME), the lowest levels in over 4 years during lockdowns. However, the sentiments have improved substantially with the roll-out of vaccine and the economic recoveries, especially in China. The prices surged to US$8,146 a tonne on 8 January 2021. The supply disruptions from leading producers including Chile, Panama has aided to the recovery of copper prices.

A global shift towards clean energy and Electric Vehicles (EVs) in the US and European market has also bloated the demand for rare earth elements (REE) which is used to manufacture batteries. Currently, China leads the global rare earth metal production. The trade tensions between the US and China has motivated the US to look for an alternate option in Australia.

Australian Copper & REE Industry

Amid the rocketing industrialisation in China and the trade tension between the superpowers, Australia has grabbed the opportunity to extend its spread by exporting its magnificent resources. Let us see how Australia's move is affecting the leading copper and rare earth mining players in the country.

Good Read: Copper Hits 8-Year High: What’s Fuelling the Momentum?

OZ Minerals (ASX:OZL) is an Australia-based copper and precious metals mining company and owns the Prominent Hill copper-gold-silver mine.

On 29 January 2021, the mining company released its activities report for the quarter ending on 31 December 2020. OZ reported a copper production of 28,939 tonnes in the December quarter. The company produced 97,620 tonnes of copper in the year 2020, achieving its FY2020 guidance.

OZ Minerals delivers on 2020 production and costs (Source: OZL ASX Update, dated 29 January 2021)

In addition to that, the company's Carrapateena operations ramped-up to 4.25Mtpa, six months earlier than scheduled.

The total revenue for FY2020 stood at $1.3 billion with a net cash flow of $32 million. The Total Recordable Injury Frequency (TRIF) fell to 5.29, against 6.27 in 2019.

Lynas Rare Earths Ltd (ASX:LYC) is a prominent rare earth metals producer which owns Mt Weld mine located in Laverton South, Australia. On 29 January 2021, Lynas has also published its activities report for the quarter ending report recording the highest-ever sales revenue of $119.4 million. The company produced 1,367 tonnes of NdPr during the quarter, in line with the production guidance.

Marketing and Sales Statistics

(Source: OZL ASX Update, dated 29 January 2021)

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The orders for the key process equipment for the Kalgoorlie project have already been placed. The miner has consented to an agreement with the US government to assemble a Light Rare Earths separation plant in the US.

 

 

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