Market participants welcomed Copper360 announcement on Wednesday that it had reached “a major operational milestone with the successful execution of the first on-ore blast at Rietberg” mine last month, which saw its shares leap nearly 10%.
From leaping to intraday high of R2.25, by 5pm the share was trading at R2.20. The share listed on the JSE in April 2023.
“This marks the first such blast in 42 years, signalling the start of Copper 360’s transition from less predictable mine development towards structured hard rock mining,” said the company.
With demand for copper projected to grow and its price on a strong footing, South African miners of the mineral, such as Copper360, are seizing the opportunities and are positioning to benefit from the looming high demand for the commodity.
Copper is used in electronics and is highly sought after in the renewable energy industry, a key global sector given the global energy transition. Other SA copper juniors such as Okiep have also been bullish about their production prospects although South Africa has competition from Zambia and the Democratic Republic of Congo in terms copper output.
Since the re-opening of the Rietberg mine in August last year, “the development and commissioning stage required Copper 360 to work through the highly oxidised, unpredictable and lower grade broken rock before being able to target the more structured hard rock resource, containing higher in-situ copper grades which aligns” to the company’s historic drill results and mine plans.
Development of the Rietberg mine will continue over the next nine months as it gears to ramp up to its projected full production of 40 000 tons per month expected by the end of this year.
The successful commencement of ore-blasting at Rietberg “marks another step in Copper 360’s aspirations to become a meaningful global copper producer by efficiently exploiting” its own vast copper resources in the region.
Implications of on-ore mining for Copper360 at Rietberg include the phasing out of broken rock processing as the company transitions from historically unpredictable broken and transitional rock, which presented challenges in estimating grade, volumes and recoveries.
On-reef mining at Rietberg also allows for the extraction of material with known grade and mineralogical characteristics which significantly improves predictability and operational planning.
“The required underground infrastructure and equipment have been strategically planned, procured and implemented to support long-term hard rock mining. The first on-ore blast marks a fundamental step in Copper 360’s evolution, ensuring more predictable production and financial performance,” said the company.
Analysts say that although the primary rise in the copper price has been inflationary, the underlying demand for copper is seen increasing by 2.6% year on year.
“Copper is poised for a massive run in the next five years. The most obvious long term trade. This is a great time to discover more new copper deposits,” said one market observer.
Copper prices have risen to about $105 (R1949) per ton and analysts say the prices could sustain this run over the next few years given demand from renewable energy.
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