Host nations ramp up pressure on copper miners to share metal revenue windfall

SOME of the world’s important copper-producing nations, eager to recover from the Covid-19 pandemic, are putting pressure on miners to share more of their profits, said Bloomberg News.

Earlier this week, Chile’s lower house approved a proposed royalty on copper in a move the industry says risks thwarting investment, said Bloomberg News.

The newswire also reported efforts by the front-runner in Peru’s presidential race for a tougher stance against mining companies to ensure more of the revenue generated by vast mineral wealth stays in state coffers. In Zambia, the southern African country’s state-owned copper miner said it wanted a bigger slice of the revenues from copper operations.

“We could certainly see more examples of this in the coming months,” Colin Hamilton, MD for commodities research at BMO Capital Markets, wrote in a note to clients cited by the newswire.

Copper futures were nearly 90% higher from a year ago after Chinese factories recovered from the Covid-19 pandemic and supply problems were experienced among producers. The pressures exerted by pandemic lockdowns were fuelling calls for more state participation in the money copper miners stand to make.

However, mining companies may stand firmer than in previous cycles on the extent to which they share profits as ESG pressures were making it more expensive to build mines.

With companies stepping up to highlight their ESG efforts “… host countries may find that the miners might not be as passive this time round,” Bloomberg Intelligence analyst Grant Sporre told the newswire in an e-mailed response.