The first quarter of 2024 began with copper prices remaining steadfast, staying within the US$8,000 to US$8,500 per metric ton (MT) range.
However, the end of the quarter saw the red metal gain momentum on the LME and surge to a quarterly high of US$8,973 on March 18 before moving to set a two-year high on the London Metal Exchange of US$9,869 on April 30.
The dramatic gains came on the back of tightening concentrate supply to Chinese smelters, who cut supply as competition between upgraders caused treatment charges to fall to their lowest point since 2010. While supply for refined copper was expected to shift into a deficit in 2025, the lowered output from smelters is looking to move that ahead to later this year.
With higher copper prices affecting consumers, the effects have started to be felt by copper producers. So which companies have seen the biggest share increases on the TSX? Here are the Top 5.
Data for this article was retrieved on April 24, 2024, using TradingView’s stock screener, and only companies with market capitalizations greater than C$10 million are included.
1. Taseko Mines (TSX:TKO)
Year-to-date gain: 73.91 percent; market cap: C$944.77 million; current share price: C$3.20
Taseko Mines is a copper producer and development company and holds a portfolio of assets in British Columbia, Canada and Arizona, US.
Its primary asset is the Gibraltar mine located in Central BC. The mine is Canada’s second largest open-pit copper mine after Teck Resources’ (TSX:TECK.A,TECK.B,NYSE:TECK) Highland Valley mine. Gibraltar boasts an 85,000 MT per day processing capacity and in 2023 produced 123 million pounds of copper.
On March 25, Taseko acquired 100 percent ownership of the Gibraltar mine after it entered into an agreement with Dowa Metals and Mining (TSE:5714) and Furukawa (TSE:5715) to purchase the remaining 12.5 percent interest in the property. The company said the agreement was made as both Dowa and Furukawa are divesting themselves of their copper-mining investments.
In addition to Gibraltar, the company is also working to advance its Florence copper project located near Florence, Arizona. The mine is expected to enter commercial production in 2025, and when fully operational will produce approximately 85 million pounds of copper per year.
On January 16, the company provided an update for the project and announced it had secured an additional US$50 million in funding from Taurus Mining Royalty Fund in exchange for 1.95 percent of gross revenue from the sale of all copper from Florence. The company said the additional funds will allow it to accelerate construction at the site, with the build to begin in the second quarter.
Shares in Taseko reached a quarterly high of C$2.99 on March 27.
2. McEwen Mining (TSX:MUX)
Year-to-date gain: 57.81 percent; market cap: C$721.14 million; current share price: C$14.96
McEwen Mining is a mining company led by industry veteran Rob McEwen. It is working to advance its Los Azules copper project in San Juan, Argentina as well as the Fox Complex gold mines in Ontario, Canada, the Gold Bar mine in Nevada, United States and the San Jose gold mine in Argentina.
Shares of McEwen Mining saw their largest gains at the end of February and the beginning of March. This rising share price coincided with positive news from the company’s Q4 and full-year 2023 report, which was released on February 29.
In the announcement, McEwen said it had 22 drills on site and was working toward delivering a feasibility study in Q1 2025. It also reported a 76 percent expected average copper recovery over a 27 year life-of-mine and projected after-tax net present value of US$262 million.
Owned by subsidiary McEwen Copper, the joint project is a partnership between McEwen Mining which holds 48 percent, Rio Tinto (NYSE:RIO,LSE:RIO) which holds 14.5 percent and Stellantis (NYSE:STLA) which holds 19.4 percent.
Shares in McEwen Mining reached a quarterly high price of C$13.36 on March 28.
3. First Quantum Minerals (TSX:FM)
Year-to-date gain: 47.32 percent; market cap: C$12.94 billion; current share price: C$15.94
First Quantum Minerals is a copper mining and development company with a global portfolio of Assets.
Its primary asset has been the Cobre Panama mine located west of Panama City, Panama. The mine boasts 3 billion MT of proven and probable reserves and represents 1 percent of the World’s copper supply. The mine was ordered to close down in November 2023 after the Panamanian Supreme Court invalidated an extension to the mine’s license.
In a December 2023 release, the company said it was working on developing a closure plan for the mine that it expects to present in June 2024, but also noted it is pursuing all appropriate legal avenues to protect its investment and rights.
In the company’s Q1 2024 financial update, released on April 24, First Quantum said it was continuing to work on a preservation and safe management plan for Cobre Panama, and was also working to deliver the 121,000 MT of concentrates that remain on site.
Due to the ongoing situation in Panama, the company noted that it has undergone a refinancing program to improve its balance sheet and improve liquidity. This program has included working out a prepayment agreement with Jiangxi Copper for US$500 million, the completion of a US$1.6 billion senior secured second-lien at 9.38 percent due in 2029, and the issuance of 139.93 million common shares to raise proceeds of US$1.15 billion.
In addition to the updates on its mine in Panama, First Quantum reported the production of 100,605 MT of copper through Q1, a 59,595 MT decrease over Q4 of 2023, which were largely attributed to the closure of Cobre Panama. These declines were partially offset at its Sentinel mine in Zambia where a year-over-year increase of 25,993 MT limited the loss to 38,148 MT of copper from the same period a year ago.
However, First Quantum noted that production may be impacted in 2024 as drought conditions in Zambia have led to the government declaring a national emergency. Due to El Nino, there have been reduced water levels in the Kafue and Zambezi Rivers and power generation throughout the country has been impacted.
The company has been working to mitigate these challenges and has entered into offtake agreements with third-party traders for power sourced from the Southern African Power Pool for a total of 80 megawatts. The agreements are expected to cost US$25 million.
Shares of First Quantum reached a quarterly high of C$15.01 on March 15.
4. Hudbay Minerals (TSX:HBM)
Year-to-date gain: 46.01 percent; market cap: C$3.70 billion; current share price: C$10.60
Hudbay Minerals is a copper production and development company with assets in BC and Manitoba, Canada; Arizona, US; and Peru.
The company has four producing mines. According to its management discussion and analysis (MD&A) for 2023, Constancia and neighboring Pampacancha mines in Peru produced 100,486 MT of copper. Copper Mountain in BC saw 12,154 MT of copper and Snow Lake in Manitoba produced an additional 19,050 MT of copper. In total, this represented a 27,518 increase in copper production for 2022.
In addition to its mining assets, the company is also working to advance its Copper World project in Arizona. In the MD&A, the company indicated it is working on receiving the final state permits for the site and expects to receive them sometime in 2024. The company is also in the process of completing a three prerequisites plan that is required for sanctioning which it expects in 2025.
When complete, the mine is expected to have a 20 year life span, and according to a mineral resource estimate included in a March 28 annual reserve and resource update, Hudbay reported proven and probable average grades of 0.54 percent copper from 385 million MT.
The company is also working on its greenfield Mason project in Nevada. Hudbay says it is developing the project as a long-term future asset and expects it to have a 27 year lifespan. Resource estimates from the site show measured and indicated average grading of 0.29 percent from 2.22 billion MT of ore, with additional inferred grading of 0.24 percent from 237 million MT.
Shares of Hudbay reached a quarterly high of C$9.48 on March 28.
5. Ivanhoe Mines (TSX:IVN)
Year-to-date gain: 43.76 percent; market cap: C$23.03 billion; current share price: C$18.33
Ivanhoe Mines is a copper production and development company that operates the Kamoa-Kakula copper mine, one of the largest in the world.
Located in the Democratic Republic of Congo, the mine is a joint venture between Ivanhoe, which holds a 39.6 percent stake, China’s Zijin Mining Group (OTC Pink:ZIJMF), which holds another 39.6 percent stake, the Government of the Democratic Republic of Congo with a 20 percent share and Crystal River Global, which holds the remaining 0.8 percent.
On April 3, Ivanhoe announced Q1 2024 production results for Kamoa-Kakula. In the report, Ivanhoe indicated that the mine had produced 86,203 MT of copper while achieving a quarterly mining record of 2.5 million MT of ore from Kakula and Kamoa 1 underground mines.
The company also said that ore was being stockpiled ahead of the anticipated early commissioning of the Phase 3 concentrator, which is now scheduled to come online in May of this year. In addition, Ivanhoe said it is working to upgrade power generation at the site from 58 megawatts to over 200 megawatts ahead of the completion of the phase 3 smelter in Q4 2024.
Once online, annual production at Kamoa-Kakula will increase to 650,000 MT of copper per year.
Shares in Ivanhoe reached a quarterly high of C$16.24 on March 15.
FAQs for investing in copper
Is copper a good investment in 2023?
Copper’s price trended downward throughout 2023. Although many experts have a positive long-term outlook for the red metal based on supply concerns and its growing role in the energy transition, recession worries in countries across the globe are creating short-term headwinds for copper, which is heavily used in industry.
Investors who are interested in copper should make sure to perform their due diligence, as the volatility and unpredictability of markets and economies at the moment means that nothing is guaranteed.
What is copper used for?
Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.
Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.
How to invest in copper?
Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.
For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange.
How to invest in a copper ETF?
Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.
In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.
There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).
How much is copper worth?
The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.
Where is copper mined and how is it processed?
Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2022, putting out 5.2 million MT of the metal. Rounding out the top five are Peru and the Democratic Republic of Congo with 2.2 million MT each, China with 1.9 million MT and the US with 1.3 million MT.
Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.
The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.
Article by Dean Belder; FAQs by Lauren Kelly.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
