Costing $6 billion and set to produce 1 billion pounds of copper, the Resolution Superior mine in Arizona US, has gained Congress approval.
Still to be signed off by President Barack Obama, the deal concerns a land swap between the owners of Resolution, the company formed between commodity giants Rio Tinto and BHP Billiton, and the US Federal government. The government is set to receive 4,500 acres (18 km2) of environmentally sensitive land in Arizona in exchange for the 3,000-acre (12 km2) proposed mine site. The mine sits on equally sensitive land and is opposed by environmentalists and indigenous populations, however Superior is close to the existing copper mines of the Globe-Miami mining district, giving a precedent to operation in the area.
55% owned by Rio Tinto and 45% owned by Billiton, Resolution Superior mine was originally in the hands of Magma Copper, which was subsequently acquired by Billiton in 1996, a deal that lost Billiton AUD$3.2 billion. Superior made its first introduction to US legislation in May 2009; it has taken this long to seek and find approval.
To date, almost $1 billion has been invested with a further $6 billion required to develop the mine. But the rewards are seen to be worth the money with Rio Tinto reporting, “an inferred resource of 1.624 billion tonnes containing 1.47 per cent copper and 0.037 per cent molybdenum, at depths exceeding 1,300 metres (0.81 mi). This is one of the largest copper resources in North America.” According to Resolution, it is also one of the biggest in the world.
Copper prices have seen a steady but volatile decline since 2011 but recent upward movement, certainly over the last few days have seen the commodity rise from 2.840 to today’s price of 2.922.
On 22 December, Bloomberg reported on commodities, stating that, “Investors increased wagers on crude oil and corn and got less bearish in copper.”
Rio Tinto has reported a gain in share price following the news, rising from 2597 to 2872, and BHP Billiton has risen from 23447 last week to today’s 24985.
MT4 chart: Copper
MT4 chart: Billiton
MT4 chart: Rio Tinto
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