Fortescue eyes developing its copper assets, not looking at Cobre Panama

24th March 2024 By: Reuters

Fortescue eyes developing its copper assets, not looking at Cobre Panama

The Cobre Panama mine

Australia's Fortescue, the world's fourth-largest iron-ore miner, is looking at developing its copper resources but has not made a decision yet, its founder and executive chairperson told Reuters on Saturday.

"The company has choices in front of it ... we have a lot of copper options on the table. And when we feel the time is right, we'll pull the trigger," Andrew Forrest said during a visit to Beijing.

However, he said the company was not looking at First Quantum's idled Cobre Panama copper mine. Cobre Panama, one of the world's largest open-pit copper mines, was forced to shut in December after Panama's top court ruled its contract was unconstitutional.

In February 2023, Fortescue said it would focus on copper, rare earths and lithium while ramping up exploration activities for critical minerals portfolio.

"We haven't pulled the trigger on lithium, which has been wise because their prices collapsed," said Forrest.

Copper prices rallied about 13% from early February, touching an 11-month peak of $9,025.5 on Monday, before pulling back on Friday amid a stronger dollar and profit taking.

The trigger for the latest price jump was news that major top Chinese copper smelters reached an agreement to lower operation rates at some loss-making plants after their margins were squeezed amid a tightening supply of raw materials.

By comparison, lithium prices fell more than 80% in the past year due to softening EV demand and surging supplies, forcing many high-cost producers worldwide to cut production.

Foretescue will continue to invest in iron-ore, a steelmaking ingredient, as demand from renewable energy and the manufacturing sectors will grow, Forrest said.

"There's always ups and downs, but the trend is still rising...we're seeing China growing from an emphasis on infrastructure to a dual emphasis on infrastructure and manufacturing."