Australian junior Aurelia goes after Glencore copper mine
Australian exploration and development Aurelia Metals (ASX:AMI) said on Friday it has begun discussions with miner and commodities trader Glencore (LON: GLEN), which it hoped would lead to the acquisition of the Swiss company’s CSA copper mine.
“The company’s high-level assessment is that CSA mine could potentially be a strategic fit for the company, consistent with our general view that further consolidation in the Cobar is potentially attractive,” Aurelia said in a statement.
The underground CSA mine, located in the state of New South Wales, produced 48,000 tonnes of copper concentrate last year. It has a productive life of five years and ore reserves to last around ten, according to Glencore’s reserves and resources report.
Aurelia, which is developing the nearby Hera-Nymagee project in western New South Wales, is not the only company that has expressed interest in CSA.
Last month, fellow copper junior Aeris Resources (ASX:AIS) offered Glencore $575 million for the operation, but the parties were unable to reach an agreement.
News of the talks between Aurelia and Glencore comes at a time when companies are scrambling to grab copper assets amid expectations that bigger power grids around the world and an electric-vehicle boom will boost demand, while supplies will remain constrained.
However, industry analysts at CRU say the coming online of major projects — Anglo’s Quellaveco (2022), Teck’s Quebrada Blanca expansion (2021) and First Quantum’s Cobre Panama (already in production) will momentarily eliminate the gap between supply and demand.
The research group has cut its forecast deficit and now expects the market will be in a small surplus this year and next, but short again by 250,000 tonnes by 2023.