The copper market, much like gold, is in the midst of an impressive bull run with no signs of slowing down thanks to soaring demand for copper worldwide. In fact, as noted by Reuters, “Copper’s bull market should continue for at least the next three years, fueled by global supply challenges and hot demand for the metal to power energy transition and artificial intelligence technologies.” All of which could be a powerful catalyst for copper stocks such as Troilus Gold Corp. (TSX: TLG) (OTCQX: CHXMF), Glencore (OTC: GLNCY), Freeport-McMoRan (NYSE: FCX), Rio Tinto (NYSE: RIO) and BHP Group (NYSE: BHP).
Fueling further upside for copper, BHP expects the world to consumer another million metric tons of copper per year on average through 2035 thanks too copper-intensive technologies, as noted by Reuters. “BHP said in a report released on Monday that global copper demand has grown at a 3.1% compound annual growth rate over the last 75 years. But this growth rate has been slowing to only 1.9% over the 15 years to 2021. Looking to 2035, however, we expect this growth rate to jump back to 2.6% annually.”
Look at Troilus Gold Corp. (TSX: TLG) (OTCQX: CHXMF), For Example
In recent developments, Troilus Gold Corp. announced the receipt of two new letters of intent from major European Export Credit Agencies: Finnvera plc and The Swedish Export Credit Agency (EKN) with support of up to approximately US$500 million, to advance the development of the Troilus Project.
These new LOIs follow the recent US$500 million LOI from Euler Hermes announced November 13th 2024, bringing total support from global export credit agencies to approximately US$1 billion, which addresses nearly the entire project’s US$1.08 billion capex and strongly reinforces the importance of the Troilus Project as a reliable source of critical minerals to meet growing global demand.
The receipt of multiple non-binding LOIs from leading European export credit agencies highlights the strategic role of the Troilus Project within critical mineral supply chains and further enhances the company’s strategic approach to securing a comprehensive financing package for the development of the 22-year, 50,000 tpd open-pit mining operation in Quebec, Canada.
Highlights:
- Troilus has received an LOI from Finnvera, the official export credit agency of Finland, confirming in-principle eligibility for an untied loan guarantee of up to US$300 million to support the Project’s financing package.
- Finnvera’s support is contingent on strategic partnerships with a Finnish equipment provider and Boliden, one of Europe’s largest smelting companies with copper operations in Sweden and Finland. This collaboration contemplates equipment procurement from the Finnish provider for between US$50-100 million and an anticipated 10-year copper-gold concentrate offtake agreement with Boliden, estimated at an annual value of approximately US$200 million.
- The Swedish Export Credit Agency (EKN) in parallel with Finnvera is providing cover of approximately US$200 million or up to 25% of the offtake agreement with Boliden under the Swedish Raw Material Guarantee.
- Such support is also subject to customary due diligence including but not limited to, economic, technical, environmental, governance and social.
- These LOI’s from Finnvera and EKN complement the US$500 million LOI received from Euler Hermes, securing support from premier European credit agencies and significantly strengthening Troilus’s ability to execute its development plans.
Justin Reid, CEO of Troilus, commented, “With the addition of US$500 million in LOIs from Finnveraand EKN, we have now received in-principle support representing a significant percentage of the Project’s total capex. This further demonstrates the strength and strategic importance of the Troilus Project on an international scale. The partnerships with the Finnish, Swedish and German export credit agencies, underscore the strength of the Project's fundamentals and the confidence these global institutions have in Troilus. As we progress towards securing a fully funded construction package, we’re confident in our approach and proud to see Troilus recognized as a critical North American copper-gold asset in the global supply chain.”
Troilus remains focused on finalizing its financing strategy and advancing the Troilus Project toward development. These recent LOIs form a strong foundation, and the Company looks forward to sharing further updates on this multi-faceted financing package in the coming weeks and months.
Auramet International Inc. continues to assist with the structuring, identification and engagement of potential financing participants.
Other related developments from around the markets include:
Glencore’s Chief Executive Officer, Gary Nagle noted, “Our full-year 2024 production guidance has again been maintained and reflects the additional steelmaking coal volumes that have contributed to our portfolio since closing of the EVR transaction on 11 July 2024. During the current quarter, key anticipated quarterly sequential production improvements have been achieved, notably at African Copper +6kt (+13% Q3/Q2), Antapaccay +9kt (+35% Q3/Q2), Kazzinc +13kt (+27% Q3/Q2), Murrin Murrin +1kt (+7% Q3/Q2) and Australian energy coal +3.6mt (+27% Q3/Q2). Basis Marketing’s performance year to date, we continue to expect full year Marketing Adjusted EBIT in the $3.0-$3.5 billion range, being around the top end of our long-term $2.2-3.2 billion p.a. guidance range.”
Freeport-McMoRan reported third-quarter 2024 net income attributable to common stock of $526 million, $0.36 per share, and adjusted net income attributable to common stock of $556 million, $0.38 per share, after excluding net charges totaling $30 million, $0.02 per share, primarily associated with impairments for legacy oil and gas matters and nonrecurring labor-contract charges at Cerro Verde, partly offset by a reduction in accruals for uncertain U.S. tax positions. Richard Adkerson, Chairman of the Board, and Kathleen Quirk, President and CEO, said, “During the third quarter, our global team generated strong margins and cash flows, achieved our production targets, continued to prioritize productivity and cost control, and advanced initiatives for future growth. We remain focused on strong execution of our plans globally as we work to address damage from a recent fire affecting a portion of our new Indonesia smelter facilities. We are confident in our team’s ability to restore smelter operations and achieve a safe and efficient ramp-up as soon as possible. The outlook for our business is positive, supported by our position as a leading copper producer with a strong financial profile, favorable market fundamentals and value enhancing options for future growth.”
Rio Tinto Chief Executive Jakob Stausholm recently said: “Our operational performance continues to progress. While there are still significant improvements ahead, we are beginning to see a step-change in production, including from our Queensland bauxite business following the roll-out of the Safe Production System. We are growing with discipline in the materials the world needs for the energy transition. Construction of the Simandou high grade iron ore project in Guinea is advancing at pace, the ramp up of the Oyu Tolgoi underground is on track and we are set to achieve first production from the Rincon starter plant by the end of the year We continue to prioritise the decarbonisation of our business, announcing the installation of carbon free aluminium smelting cells using ELYSIS technology at our Arvida smelter in Quebec and an investment in a R&D facility to test our low-carbon ironmaking process, BioIron, in Western Australia. We also signed 20-year electricity arrangements backed by renewable electricity to secure the future of the Tiwai Point aluminium smelter in New Zealand. As we progress against our four objectives and strategy, we have a clear long-term pathway to profitable growth and continued attractive shareholder returns.”
BHP Group says it’s “strengthening our important strategic partnership with global technology company ABB, through the signing of a multi-year Global Framework Agreement. ABB is a leader in industrial automation, electrification and digitalisation, and delivers critical technologies and equipment for BHP’s global operations including Escondida in Chile, our Jansen project in Canada, and various packages across our Australian assets. This new agreement will enable further opportunities for BHP and ABB to collaborate in support of project delivery, operations and maintenance, as well as progressing operational decarbonisation efforts across BHP’s global operations.”
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