Article from Australian Financial Review: EMR closes $125m copper deal as price hits 4-year high

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EMR closes $125m copper deal as price hits 4-year high

By: James Thomson
http://www.afr.com/business/mining/copper/emr-closes-125m-copper-deal-as-price-hits-4year-high-20171227-h0asjc

Mining private equity group EMR Capital has closed a $US97.1 million ($125 million) deal to buy an 80 per cent stake in a copper mine in Zambia, and remains on the hunt for further deals in the sought-after commodity.

The completion of the deal came as the copper price hit $US7,259 a tonne in London on Wednesday night, the highest since January 2014.

The price was pushed higher by reports that China’s largest copper producer, Jiangxi Copper Co, was told to cut production for at least a week before a new assessment is made on local pollution levels. Earlier in the month, the country’s second largest smelter, Tongling Nonferrous Metals Group, was asked to make similar cuts.

Optimism about the growth outlook for the global economy, and particularly the US economy, has also propelled the commodity higher.

EMR chief executive Jason Chang said the acquisition of the Lubambe copper mine took around four months to close as it moved through government approvals.

The government of Zambia will be intimately involved in the project given 20 per cent will be held by ZCCCM investments, which is majority owned by the Republic.

It’s a position Mr Chang is very happy with.

“We always like people with skin in the game – they take it seriously,” he told The Australian Financial Review on Thursday.

Lubambe is an existing underground high grade copper mine and a development project, with a total resource base of approximately 9.2 million tonnes of contained copper metal.

The mine currently produces close to 20,000 tonnes of copper concentrate per annum and EMR has big plans to optimise operations and ramp up annual production over time.

Mr Chang is bullish on the outlook for copper, and points also to the boom in electric vehicles as driving demand.

“Copper is going well and we have a long term view on copper. It’s one of those commodities where demand is going to continue to grow.”

– With Bloomberg