Indian Copper was down 0.29% to Rs 483.6 per kg today. Copper tested a high of Rs 485.3 per kg, and a low of Rs 482 per kg.
Anglo America has sold a 22 per cent stake in its Quellaveco copper project in Peru to Mitsubishi Corporation for $ 600m. The deal, announced on Thursday morning, makes it all but certain the London-listed miner will sanction development of the mine, which will initially produce more than 300,000 a tonne a year of copper, by the end of 2018. The sale shows how big mining companies, which have just emerged from a bruising downturn, are starting to think about growth after several years where management teams have been focused on cost cutting and reducing debt.
But unlike the past they are taking a more cautious approach by looking to share the burden of multibillion-dollar projects that can take many years to develop. Anglo boss Mark Cutifani has been searching for a partner to help finance the Quellaveco project, which will cost billions of dollars to develop. Mitsubishi already owns 18.1 per cent of Quellaveco and Thursdays deal implies a valuation for the project of over $ 2.7bn.
Even though demand for copper is expected to rise as the world decarbonises and moves to cleaner sources of power, there is a dearth of projects under development. If new developments are not sanctioned analysts say there could be a yawning supply gap by 2025. There are only a couple of big copper projects currently in the pipeline. One is First Quantums Cobre Panama, which is expected to come on stream later this year. Another is Rio Tintos Oyu Tolgoi underground project but that wont reach full capacity until of 600,000 tonnes until 2025 at the earliest. Glencore has also restarted production from its Katanga mine in the Democratic Republic of Congo this year after completing a major overhaul.