Copper, nickel prices likely to be hit by El Niño event
El Niño, a cyclical meteorological phenomenon that brings extreme weather to parts of Southeast Asia, Australia and the Americas, has arrived, and it’s not looking good, according to Australia’s Bureau of Meteorology.
Despite earlier predictions of a tame 2015 El Niño event, the one currently under way in the tropical Pacific could become a "substantial" event later in the year, said the body Tuesday.
"This is a proper El Niño effect, it's not a weak one," David Jones, manager of climate monitoring at the Australian weather agency, told reporters according to AFP. "There’s always a little bit of doubt when it comes to intensity forecasts, but across the models as a whole we'd suggest that this will be quite a substantial El Niño event."
The phenomenon, which occurs every two to seven years, is known to bring crippling drought conditions to Australia and monsoons to parts of Southeast Asia, which can devastate economies and disrupt global agricultural markets.
Mining is not immune to El Niño. In the past, droughts in Indonesia, a top nickel and copper producer, have led to output drops as hydroelectric power facilities were affected, as were the water levels of inland waterways used for ore transportation. In Peru, heavy rains flooded into zinc mines, triggering price spikes.
First observed in the 19th century fishermen in Peru, the recurring weather phenomenon — a warming of the Pacific Ocean as part of a complex cycle linking atmosphere and ocean — has in the past affected Australasia as well South America. Its climactic can reach as far as West Africa.