After reaching a four-month high on Monday, copper fell the rest of the week on concerns about unusually high inventories. European Central Bank President Mario Draghi's comment that downside risks regarding the Eurozone's economic outlook remain — although recovery is expected later in 2013 — also put a damper on copper prices. Draghi's remark came after a corruption scandal in Spain put pressure on Prime Minister Mariano Rajoy to resign, and amidst increasing worries about the popularity of former Italian Prime Minister Silvio Berlusconi ahead of elections this month, Reuters reported. Draghi said the risks to Europe's recovery include the possibility of weaker-than-expected demand and exports, slow implementation of structural reforms in the euro area and geopolitical issues and imbalances in major industrialized countries. The ECB opted to keep interest rates unchanged at the record-low rate set in July last year. Meanwhile, COMEX copper inventories in New York rose to the highest level seen since May, while stockpiles monitored by the London Metal Exchange (LME) were at the highest level since December 2011, Bloomberg reported. “There is no indication of bullishness from the demand side,” Fang Junfeng, an analyst at Shanghai Cifco Futures, told Bloomberg. “The problems facing the European region have led some traders to see the outlook for the global economy as negative.” Trading in copper and other base metals was also thin this week ahead of Chinese New Year celebrations, which start on Saturday. On the LME, copper for three-month delivery closed down 0.55 percent, to $8,200 per ton, from the $8,245 closing price on Wednesday. COMEX copper for March delivery was down 0.4 percent, at $3.7255 per pound, in mid-afternoon trade in New York.
Company newsRio Tinto (LSE:RIO,ASX:RIO,NYSE:RIO) is considering restarting its copper-gold Panguna mine in Papua New Guinea after abandoning the mine in 1989, Reuters reported. A study by Rio's subsidiary, Bougainville Copper, notes that the mine contains at least 5 million tonnes of copper and 19 million ounces of gold. Another Reuters report notes that Mongolia wants an explanation from Rio Tinto regarding around $2 billion in cost increases at the Oyu Tolgoi copper and gold mine. Tiger Resources (ASX:TGS) announced high-grade copper results from a diamond-drilling program at Judeira South, located within its Kipoi copper project in the Democratic Republic of the Congo. Marengo Mining (ASX:MGO,TSX:MRN) said China Nonferrous Metal Industry's Foreign Engineering and Construction Company has given it a price of $1.42 billion for fixed engineering, procurement and construction — as well as processing facilities, mine infrastructure and port facilities — at the Yandera copper-molybdenum-gold project in Papua New Guinea. It said other infrastructure, including a mining fleet, pre-strip and power transmission line, should cost between $300 and $400 million. The company also expects a Chinese state bank to provide 70 percent of the total development financing needed. Southern Copper's (NYSE:SCCO) Peruvian union workers have eased their wage demands to an 11-percent increase; they had previously been asking for 14 percent more. Union officials said that if they haven't reached a deal with the company by the end of this week, the union could vote to strike, 4-traders.com reported. Lundin Mining (TSX:LUN) has been considering potential copper acquisitions in Eastern Europe, and could fund a deal worth as much as $700 million, Bloomberg reported, citing CEO Paul Conibear. Junior company news Discovery Metals (ASX:DML) shares dropped to their lowest level since September after China's Cathay Fortune Investment decided to drop its AU$830-million bid for the company. Cordoba Minerals (TSXV:CDB) may have discovered a “significant new drill target” at its Cordoba project in Colombia. It said that soil sampling has identified a significant copper-gold anomaly. The company has also been granted a water-use permit, which is required for drilling at the main Montiel copper-gold porphyry target.
Copper Fox Metals (TSXV:CUU) acquired mineral tenures inside the Schaft Creek copper-gold-molybdenum-silver project in Northern British Columbia, as well as tenures that increase the size of its Arizona-based Sombrero Butte copper project.Sunward Resources (TSX:SWD) said that effective immediately, Philip O'Neill will assume the role of CEO as Colin Andrew has stepped down. It also appointed Gil Leathley to the position of chief operating officer. Duluth Metals (TSX:DM) identified two new mineralized areas at the Duluth complex in Northeast Minnesota. One area consists of platinum-group-element mineralization while another's mineralization is comprised of copper, nickel and platinum group elements. Securities Disclosure: I, Ragnhild Kjetland, hold no investment interest in any company mentioned in this article. Copper Drops on High Inventories and Risks to European Recovery from Copper Investing News