Latest news with #Antofagasta
Business Times
2 days ago
- Business
- Business Times
China's copper boom under threat as miners test bargaining power
[BEIJING] The unrelenting expansion of Chinese copper processing capacity over the past few years has now become a global headache, as smelters scramble to secure the ore they need to produce the vital industrial metal. Output in the world's top producer of the refined metal has ballooned to a record this year, even in the face of trade tensions wars that are clouding the outlook for demand. The resulting competition has handed bargaining power to some of the world's largest miners. Copper treatment charges, typically a key earner for processors, have plunged deep below zero on the spot market. Chilean miner Antofagasta has proposed negative charges for contracted supplies to smelters in the second half. The fraught situation for smelters worldwide is fuelling expectations of cuts – Glencore shut a facility in the Philippines in February. It's also focusing market attention on the surprising resilience of China's output, and raising the question of how long that can last. Analysts and industry executives say China's output is more resistant to financial pressures because it is now dominated by state-owned producers and by relatively large, efficient and low-cost smelters. Three major new plants were opened just last year, more than offsetting the pain felt by more modest operations. But there's also a still-substantial segment of China's market that is made up of smaller, privately owned smelters with more exposure to a tightening spot market. CRU Group says those plants account for about a quarter of the country's output. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Even if you have very deep pockets and are willing to operate at a loss, at the end of the day you might have to cut production because you simply cannot get the copper concentrate,' said Craig Lang, principal analyst at CRU Group. The stakes are high for the global copper smelting industry. With all high-cost facilities facing losses, every ton that resists financial pressure in China means more pain for those elsewhere. Spot treatment charges to process concentrate fell to negative levels in December, and reached minus US$60 a tonne last month. The fees are deducted from the cost of concentrate and ordinarily make up a large chunk of smelter revenues. Term supplies are now threatening to slide into negative territory too, meaning smelters are effectively paying more for copper ore than the value of the metal contained in it. In February, when fees were less punitive than they are now, Glencore chief executive officer Gary Nagle said he wouldn't keep open loss-making copper plants. The company mothballed a smelter in the Philippines and is cutting costs at plants in Canada. Older European copper smelters could be at risk, while Japanese plants may be sheltered due to their parent companies' stakes in Chilean mines, said Grant Sporre, an analyst at Bloomberg Intelligence. 'It's going to be a tough battle for survival.' Outlook worsening Granted, the plunge in fees is partly due to relatively slow growth in mine output worldwide – but it's primarily driven by the rapid increase in smelting capacity. China's refined copper output is set to rise 10 per cent in the first half of this year and nearly 5 per cent for the full year, according to researcher Shanghai Metals Market. The argument for China's resilient output rests largely on the belief that state-owned plants are protected because local governments want to safeguard jobs and the economy. 'This is a consequence of an economic model that is less responsive to prevailing market conditions as plants can run on very thin margins – or even make losses – for extended periods of time,' Savant, a joint venture by Marex Group and geospatial analysis company Earth-i, said in a note last month. Although cutting overcapacity across the Chinese economy has become a more important policy priority for Beijing recently, so called 'future-friendly' industries such as copper, a metal required for electrification and so for the energy transition, are being given more leeway than sectors seen to be in structural decline, such as oil refining. For producers outside China, there is no such cushion. The suspension of Ivanhoe Mines' Kakula copper mine in central Africa has been a blow to ore supply – and at the same time developments such as the ramp-up of Freeport McMoRan's Manyar smelter in Indonesia are adding more refining capacity to the market. Big smelters may still be able to maintain production for now, following some years of healthy cash flow, said Yongcheng Zhao, an analyst at Benchmark Minerals Intelligence. The less-efficient ones, though, are at risk. BLOOMBERG
The Guardian
4 days ago
- Politics
- The Guardian
Minnesota's boundary waters are pristine. Trump's ‘Big, Beautiful Bill' could pollute them forever
The story is co-published with Public Domain, an investigative newsroom that covers public lands, wildlife and government A little-known provision of Donald Trump's 'Big, Beautiful Bill' would open thousands of acres of public lands at the edge of Minnesota's Boundary Waters wilderness to a foreign-owned mining company. The move amounts to a giveaway 'in perpetuity' to a company that has lobbied in Washington for years, environmental campaigners say, potentially opening up one of the US's most famous wilderness areas to water-pollution risks. Earlier this month, conservationists cheered when Congress withdrew from the reconciliation bill several provisions that would have sold off hundreds of thousands of acres of federal land in Nevada and Utah. Those provisions had sparked fury among public land advocates and staunch opposition even from some Republicans, including the representative Ryan Zinke of Montana, who vowed to oppose the bill if the land sell-off provisions were retained. Despite that fury, a lesser-known public lands giveaway remained in the reconciliation bill. If approved as currently written, the provision could lease in perpetuity land near Minnesota's Boundary Waters wilderness, an enormous complex of pristine lakes and untrammeled forests, to Twin Metals Minnesota, a subsidiary of the Chilean mining giant Antofagasta PLC. Becky Rom, the national chair of Save the Boundary Waters, a campaign to protect the wilderness area from mining, described the provision as 'a giveaway of critical and sensitive federal public land forever to a single mining company'. 'It is a giveaway,' Rom added. 'This is forever.' First set aside by Congress in 1964, the 1.1m-acre Boundary Waters canoe area wilderness, as it is officially known, is the only large-scale protected sub-boreal forest in the lower 48 states. Each year, some 150,000 visitors come to partake in the all-American tradition of canoe travel and enjoy a pristine landscape where wolves, moose, loons, bears and bald eagles thrive. Those who come to explore it help contribute to Minnesota's $13.5bn outdoor recreation economy. According to the US Forest Service, the landscape contains 'healthy forests with extremely high water quality'. It is 'irreplaceable'. But the boundary waters also sit atop mineral-rich lands. Antofagasta has for years sought to develop a copper and nickel mine on public land near the wilderness, amid the headwaters that feed its famous lakes. The company and its American subsidiary, Twin Metals Minnesota, came close to success during the first Trump administration, which overturned an Obama-era denial and renewed mining leases for the project. The Biden administration, recognizing the threat the proposed mine posed to the environment, subsequently rescinded those discretionary leases, arguing that they were legally deficient. The Biden administration also issued an order that prohibited mining for 20 years in the portion of the Superior national forest where Antofagasta wants to extract copper and nickel. Twin Metals Minnesota, which declined to comment for this story, filed litigation to fight the Biden policies in court. That lawsuit is ongoing. Meanwhile, the companies went to Capitol Hill in their quest to build their mine, which they say will directly employ more than 750 people and could revitalize 'the entire region'. In the last three years alone, Antofagasta and Twin Metals have poured more than $1.6m dollars into lobbying efforts in Washington DC, according to OpenSecrets. Among the lobbying shops they retained is Brownstein Hyatt Farber Schreck, the powerful firm that was the long-time home of David Bernhardt, interior secretary during Trump's first term. Brownstein's employees and its political action committee, in turn, were together among the top 10 donors last election cycle to the campaign committee of representative Bruce Westerman of Arkansas, the powerful chair of the House natural resources committee. Last month, that lobbying apparently bore fruit. Westerman's committee unveiled its portion of the president's reconciliation bill and it contained a major win for Antofagasta and Twin Metals. The bill, which passed the House and is now being considered by the Senate, includes provisions that rescind the Biden administration's 20-year mining prohibition in the Superior national forest and grants Twin Metals 20-year mining leases to pursue its copper-nickel project on nearly 6,000 acres (2,500 hectares) of public land near the boundary waters. It also grants Twin Metals rights in perpetuity to lease renewals and it prohibits judicial review of the leases, meaning that citizens cannot sue to challenge them. Only one party retains rights to judicial review per the legislation: Twin Metals. If the federal government fails to comply with the reconciliation bill, Twin Metals can sue to enforce it. 'The reconciliation bill compels the issuance of four leases forever,' said Rom. 'To get there it, expressly overrides four federal laws, it expressly overrides BLM regulations, so all of those rules that apply to everybody else in the world, the laws, the regulations, for Antofagasta they don't apply.' 'There is a heavy hand in here,' she added. 'The heavy hand of Antofagasta.' Neither Antofagasta nor Westerman's office responded to requests for comment. Twin Metals has said its mine will provide a supply of strategic minerals that are important to national security and the emerging green energy economy. For conservationists like Rom – who grew up helping her father run an outfitting business in the Boundary Waters wilderness and has since spent decades working to protect the wilderness area – the major threat from Twin Metals' proposed mine is water pollution. That threat was described in a 2016 letter by the US Forest Service, when it initially denied its consent to the Twin Metals mine leases during the waning days of the Obama administration. There is 'inherent potential risk that development of a regionally-untested copper-nickel sulfide ore mine within the same watershed as the BWCAW might cause serious and irreplaceable harm to this unique, iconic, and irreplaceable wilderness area'. The agency's letter particularly drew attention to the risk of acid mine drainage, a potent form of water pollution that is a well-known risk of the sort of sulfide-ore mining that Twin Metals and Antofagasta wish to undertake. Any drainage from the 'mine workings and mining wastes are likely to be highly acidic', the agency said of the Twin Metals mine. Any failure to contain such waste could have 'potentially severe consequences for the BWCAW' and could 'cover a very broad region'. Twin Metals Minnesota has denied that acid mine drainage will be a potential threat, calling it a 'nonissue'. As the reconciliation bill moves through the Senate, conservationists as well as their allies in Congress are hoping it will be stripped out of the bill before it lands on Trump's desk. They argue, among other things, that the bill's Twin Metals provision may run afoul of Senate rules governing the reconciliation process, which disallows the body from including 'extraneous provisions' in budget bills. Among the opponents of the Twin Metals provision is Minnesota's junior senator, Tina Smith, though the state's congressional delegation is split on the issue. 'Senator Smith strongly opposes the reckless Republican provision in the US House-passed Big Beautiful Bill that would give a foreign conglomerate full permission to build a copper-nickel sulfide mine right on the doorstep of the Boundary Waters watershed,' wrote a spokesperson for Smith in a statement to Public Domain. 'By including this language in their massive budget bill, Republicans in Congress have made it clear they don't care about the science or the data, which shows unequivocally that this type of mining poses an unacceptable risk and stands to irreversibly pollute this pristine wilderness.'
Bloomberg
28-05-2025
- Business
- Bloomberg
Chile Copper Miner Offers Chinese Smelters Negative Processing Fees as Talks Start
Chilean copper miner Antofagasta Plc has proposed negative treatment charges for sales to Chinese smelters amid a global squeeze on supplies of ore, according to people familiar with the negotiation. Antofagasta made an initial offer this week at a treatment charge of -$15 a ton for supplies to Chinese clients, the people said, asking not to be identified discussing a sensitive commercial matter. The number was first reported by Mysteel Global.
Yahoo
28-05-2025
- Business
- Yahoo
Antofagasta plc's (LON:ANTO) Stock On An Uptrend: Could Fundamentals Be Driving The Momentum?
Antofagasta's (LON:ANTO) stock is up by a considerable 5.8% over the past month. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. Particularly, we will be paying attention to Antofagasta's ROE today. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Antofagasta is: 10% = US$1.3b ÷ US$13b (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. So, this means that for every £1 of its shareholder's investments, the company generates a profit of £0.10. View our latest analysis for Antofagasta Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. On the face of it, Antofagasta's ROE is not much to talk about. However, given that the company's ROE is similar to the average industry ROE of 12%, we may spare it some thought. Even so, Antofagasta has shown a fairly decent growth in its net income which grew at a rate of 11%. Given the slightly low ROE, it is likely that there could be some other aspects that are driving this growth. Such as - high earnings retention or an efficient management in place. Next, on comparing Antofagasta's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 10% over the last few years. Earnings growth is an important metric to consider when valuing a stock. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. If you're wondering about Antofagasta's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. Antofagasta has a three-year median payout ratio of 42%, which implies that it retains the remaining 58% of its profits. This suggests that its dividend is well covered, and given the decent growth seen by the company, it looks like management is reinvesting its earnings efficiently. Besides, Antofagasta has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 38%. Accordingly, forecasts suggest that Antofagasta's future ROE will be 11% which is again, similar to the current ROE. In total, it does look like Antofagasta has some positive aspects to its business. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Reuters
23-05-2025
- General
- Reuters
Heroes of the high plateau: UN celebrates South America's camelids
SANTIAGO, May 23 (Reuters) - Llamas, alpacas, vicuñas, and guanacos in South America are being hailed as heroes of the high plateaus for their resilience to harsh environments and climate change, as well as their cultural, economic and ecological value. Representatives from Chile, Bolivia, Ecuador, Argentina and Peru met in the city of Antofagasta in northern Chile in early May to celebrate the animals and strengthen management strategies in a meeting supported by the U.N.'s Food and Agriculture Organization (FAO). "These animals are considered heroes for their ability to thrive in harsh ecosystems like the high plateau," Andres Gonzalez, a regional officer for Animal Health and Production at the FAO told Reuters. "They represent a natural hardiness that allows them to adapt and continue to thrive in these adverse conditions." A report issued, opens new tab during the meeting, noted that as pressures on natural resources and impacts from climate change continue to grow, camelids "play a crucial role in the nutrition and livelihoods" of people across the highlands. South American camelids are mostly concentrated in the Andes in Argentina, Bolivia, Chile, Ecuador, and Peru, where they perform key functions for local communities and ecosystems. Peru leads the region in production, accounting for 5 million alpacas, or nearly 80%, while Bolivia accounts for more than 60% of llamas. Despite having a smaller share, numbering tens of thousands, camelids in Chile account for 40% to 80% of income in high Andean farms, according to the FAO. Aside from the economic benefit, camelids are also an ancestral way of life on the highlands, with breeding knowledge passing down generations of Indigenous of Aymara, Likan Antay, Quechua and Colla peoples. "They are blessed animals," Evelyn Salas, a Peruvian alpaca and llama breeder said at the meeting. "They represent our culture, our life, our ancestry, our roots, and they continue to be our future."
