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1) Commodity inventories have a pivotal role in market stability, especially regarding industrial metals like nickel, copper and zinc. The London Metal Exchange (LME) oversees these inventories, which offer crucial insights into market trends and potential supply issues. While declining inventories often signal future supply problems that could elevate commodity prices, this isn't the case currently. Nickel prices have plummeted despite inventory decreases due to market distortions, including record rate rises and challenges faced by miners like rising costs and operational difficulties. The imbalance between declining inventories and market stability is concerning. It suggests a vulnerable system susceptible to disruption from supply shortages or increased demand, potentially triggered by geopolitical tensions, mine shutdowns, or government stimuli in China. There are also still vulnerabilities in the market, highlighted by the recent closure of First Quantum's Cobre Panama mine impacting global copper supply. This emphasizes the potential for a repricing event due to the fragile balance between supply and demand. It is important that future investments in exploration and development be made in order to address low inventories. Despite mergers and acquistions in the industry, these actions don't contribute to future supply, indicating a prolonged issue in meeting future projected demand.
2) According to the Society of Mining, Metallurgy & Exploration, about 221,000 workers are expected to retire by 2029. The number of candidates that are willing to fill those spots is also shrinking. “Our workforce is aging,” said Bold Baatar, chief executive of copper at Rio Tinto. “There is a lot of baby boomers that will be looking to retire or are already retiring, and we’re continuing to rely on their expertise.” This is also the timeframe where the demand for critical minerals, such as copper, lithium and nickel, is set to increase. Globally, at least 384 new mines will need to be built to meet demand for electric vehicles by 2035, according to Benchmark Mineral Intelligence and an even bigger workforce in order to extract those minerals.
3) Ivanhoe Mines has decided to increase its exploration budget for 2024 to $90 million, quadrupling its previous allocation. The primary focus will be on the 2,654 km2 Western Foreland project situated in the Democratic Republic of Congo, adjacent to Ivanhoe's successful Kamoa-Kakula operation. This expanded exploration effort aims to achieve three key objectives. Firstly, they plan to further expand Kitoko copper discovery by deploying additional drill rigs, enhancing their understanding of its extensive exploration potential. Secondly, they aim to advance their understanding of the Makoko and Kiala deposits for potential near-term copper mine production on their majority-owned licenses. The company also aims to evaluate high-priority targets across the Forelands using evolving proprietary databases and geological models to uncover additional high-grade copper discoveries. This budget increase follows Ivanhoe's annoucement of the significant Kitoko copper discovery and the maiden minerals resource estimate for the Makoko and Kiala copper discoveries. Kitoko's copper mineralization exhibits characteristics similar to other high-grade sedimentary copper discoveries in the area. However, the Kitoko discovery presents two distinctive features: it's hosted differently within the Grand Conglomerate without the typical underlying Mwashia sandstones and showcases mineralization across at least two distinct, high-grade sedimentary horizons, disrupting Ivanhoe's exploration model. In light of this discovery, Ivanhoe is engaging in discussions with potential strategic investors to expedite the development of the Western Foreland, considering partnerships with major international corporations and sovereign wealth funds. This discovery has significantly expanded the potential for high-grade sedimentary copper systems within the Western Foreland, altering Ivanhoe's eploration outlook.
Source: Ivanhoe Mines quadruples exploration spend in search of more DRC copper - The Northern Miner