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1) According to S&P Global Market Intelligence, copper miners are enjoying higher profits but the developmental capital expenditure still lags. The industry has seen a significant rebound in earnings due to higher copper prices since 2021. However, with only two new projects committed, the global capital expenditure in copper mines dropped 0.1% year over year in 2022, and to make it worse, the copper projects that were studied in the report, took an average of 23 years to go from discovery to production. Companies are focusing their capital expenditures on extending the mine lives of their flagship projects rather than investing in exploration and development of new mines due to the time and risks involved with developing new projects. Copper reached a historic high of $4.42/lb in 2021 vs. the previous record of $3.59/lb in 2012. Despite the high copper prices, only 2 out of the 10 largest development projects in 2022 are new mines. S&P expects a small surplus in the copper supply between 2023 and 2026, when it will return to a deficit.
2) Glencore is not letting off the gas when it comes to mergers and acquisitions. With Teck's failed attempt to separate into two separate companies, coal and metals which plays into Glencore's favor, Glencore is going to pay Norsk Hydro, a Norwegian aluminum producer, $700 million for its Brazilian assets. The Norwegian company said that it will sell a 30% stake in Brazilian alumina refinery Alunorte and a 5% in bauxite producer Mineracao Rio do Norte. The deal is set to complete in the second half of this year and Norsk Hydro will used the money from the transaction for strategic growth and shareholder distribution according to Hilde Merete Aasheim, the company's CEO. The growing decarbonization trend is driving demand not only for the mass production of batteries that require the raw materials which Glencore produces, but also for primary aluminum as a strong, lightweight manufacturing metal," said Robin Scheiner, head of alumina and aluminum at Glencore.