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After faltering following its success earlier this year — including a leap to an all-time high of US$10,910 per metric ton (MT) — copper prices have begun to climb back up to end 2022.
Looking forward, the Investing News Network spoke with experts to get their takes on where copper is headed in 2023, including supply and demand factors that will affect prices, and how financing is necessary to bring more projects through development.
More than one expert said they see potential for a run above US$10,000 again next year. “Given that inventory levels are very low, a surge above US$10,000 would be no surprise,” said Dan Smith of Amalgamated Metal Trading.
The list below shows the top-performing TSX-listed copper stocks by share price performance so far this year. It was generated on December 8, 2022, using TradingView’s stock screener, and only TSX copper companies with market capitalizations greater than C$50 million at that time are included. Read on to learn more about what’s moving their share prices.
1. Turquoise Hill Resources (TSX:TRQ)
Year-to-date gain: 104.22 percent; market capitalization: C$8.56 billion; current share price: C$42.54
Turquoise Hill Resources operates the Oyu Tolgoi copper-gold mine in Mongolia, which it claims has the potential to run for 100 years from five deposits. Oyu Tolgoi is jointly owned by Turquoise Hill (66 percent) and Mongolian government-owned entity Erdenes Oyu Tolgoi (34 percent). Turquoise Hill itself is 50.8 percent owned by major global miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), which is the operator of Oyu Tolgoi. The Oyu Tolgoi mine has been in production since 2013.
The company performed well through mid-March, when Rio Tinto proposed a plan to buy the remaining 49.2 percent of Turquoise Hill that it does not already own for C$34 per share. The news drove Turquoise Hill’s share price up nearly C$9 the day of the announcement. Turquoise Hill created a special committee to review the proposal in April, and after it found that the offer “did not reflect the full and fair value of the company,” Rio Tinto raised the offer to C$43 per share.
On September 5, Turquoise Hill signed a definitive agreement with Rio Tinto at that price point. This news resulted in the company’s share price hitting a four year high of C$41.99 on September 8. However, International Shareholder Services recommended that shareholders reject the takeover offer, as the firm believed C$43 per share did not reflect the company’s value; this echoed concerns from some majority shareholders. Turquoise Hill responded, requesting that shareholders vote in favor of the transaction.
After various postponements and making and canceling of agreements with minority shareholders, the vote finally took place. Including Rio Tinto, the vote was 86.67 percent in favor; of the minority shareholders, 60.5 percent voted in favor.
With regards to progress at Oyu Tolgoi, on August 22, Turquoise Hill provided an update, including the latest news on updating the project’s integrated mine plan. The mine plan will include “minor refinements” at the Hugo North underground and the Oyut open-pit mines. The mine plan should be available in the fourth quarter of this year. The company’s Q3 production results show copper output of 36,000 MT; it also shared its financial results for Q3 in November.
Year-to-date gain: 63.67 percent; market capitalization: C$2.53 billion; current share price: C$20.95
Filo Mining is focused on advancing its Filo del Sol copper-gold-silver project in Chile along the Chile-Argentina border.
Filo’s share price began to see significant growth in mid-March after it closed a C$100 million strategic investment from BHP Western Mining Resources, which is a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP). Further positive exploration news continued to drive the company’s share price, culminating in a year-to-date high of C$26.58 on June 2. On June 3, Filo shared that it had been included in the S&P/TSX Composite Index (INDEXTSI:OSPTX).
In September, Filo Mining appointed Ian Gibbs as chief financial officer and Arndt Brettschneider as vice president of operations and projects, as well as Ron Hochstein to its board of directors. The company released its Q3 results in November, summing up its exploration work so far in 2022 and sharing its financials. According to the release, Filo would mobilize further drilling rigs in Q4.
In terms of Q4 results from ongoing exploration at Filo del Sol’s Aurora zone, October assays saw highlights including 1.54 percent copper, 12.08 grams per MT (g/t) gold and 20.5 g/t silver over 4 meters. In late November, new assays shared by the company included a large interval of 1,313.2 meters grading 0.65 percent copper equivalent.
While the company’s share price has fallen from the highs seen in June, it hit an H2 high of C$22.58 on December 12.
Year-to-date gain: 39.51 percent; market cap: C$219.74 million; current share price: C$1.13
Entrée Resources is another company that has its hands in the Oyu Tolgoi pot. The company has a 20 to 30 percent interest in mineralization extracted at the Entrée/Oyu Tolgoi joint venture property, with the amount determined by the depth of mineralization. In addition to its interest in the Oyu Tolgoi project, Entrée has a 56.53 percent interest in the Blue Rose joint venture with Giralia Resources, and a 0.5 percent net smelter return royalty with Candente Copper (TSX:DNT) on the Cañariaco project.
Entrée’s share price saw a steep spike in late January when it shared news that multiple outstanding issues between the Mongolian government and the companies involved in Oyu Tolgoi — Turquoise Hill in particular — had been resolved. Its share price saw another large jump in March, and it remained elevated through mid-April, during which time Entrée released its 2021 results and corporate highlights, and also appointed a new member to its board of directors.
On May 26, Entrée “commenced binding arbitration proceedings to seek declarations and orders for specific performance relating to certain provisions of the Equity Participation and Earn-in Agreement with Turquoise Hill Resources.” The company’s board concluded that these agreements would need to be enforced as soon as possible. The company further discussed its goals with these proceedings in its Q2 results, as well as developments at Oyu Tolgoi.
The company’s most recent news was the release its third quarter results, which include further discussion of those topics, as well as Rio Tinto’s acquisition of Turquoise Hill Resources. The company’s share price has been elevated since late October, and on December 12 it matched its previous year-to-date high of C$1.17.
Year-to-date gain: 16.02 percent; market cap: C$14.4 billion; current share price: C$11.95
Ivanhoe Mines is a mining company operating in the Democratic Republic of Congo (DRC) and South Africa. Its copper projects are all located in the DRC, the largest of which is the Kamoa-Kakula mining complex, which began operations in July 2021. The mine is a joint venture in which Ivanhoe and Zijin Mining Group (OTC Pink:ZIJMF,HKEX:2899) both have 39.6 percent, Crystal River Global has 0.8 percent and the DRC government has 20 percent. Its other projects are the Western Foreland copper project and the Kipushi zinc-copper project, and it has the Platreef platinum-group metals project in South Africa.
Ivanhoe’s share price was strong in the first half of the year, hitting a year-to-date high of C$12.90 on February 28, but it faltered in mid-year. May saw the completion of production shaft 1 construction at Platreef, and the company shared that production was on schedule for Q3 2024. In September, Ivanhoe began construction at Kipushi with a celebration to commemorate it.
In Q4, Ivanhoe’s share price has trended upwards, nearing its earlier high at C$12.28 on December 13. On October 5, the company shared its Q3 production results, including a new record of 97,820 MT of copper, beating its previous record of 87,314 just set in Q2. On November 14, it released its Q3 financial results, going into depth on its construction activities over the period as well.
5. Western Copper and Gold (TSX:WRN)
Year-to-date gain: 14.71 percent; market cap: C$350.19 million; current share price: C$2.34
Western Copper and Gold is focused on developing its Casino copper-gold project in Yukon, Canada. The company has been developing Casino since 2008, and a preliminary economic assessment (PEA) was completed for the project in 2021.
Western Copper and Gold’s share price climbed steadily from February to April, when it hit its peak of C$2.97 on April 13, but it trended down throughout Q2. The company followed its PEA with a feasibility report that was released in August this year. According to the report, the company expects to see a total production over the 27 year life of the mine of 4.27 billion pounds of copper, 6.96 million ounces of gold, 36.09 million ounces of silver and 346 million pounds of molybdenum.
In late October, the company announced it had been asked to revise its environmental and socioeconomic statement, which it issued in 2016. However, it stated that this should not have an effect on its permitting timeline. Most recently, Western Copper and Gold announced that Rio Tinto, an investor in the company, is extending its rights. The company’s share price has risen in December, reaching an H2 high of C$2.64 on December 13.
FAQs for investing in copper
Is copper a good investment in 2022?
While the metal is currently trending down in terms of its price, experts see that as a symptom of COVID-19 lockdowns in China, as well as other short-term headwinds. So when will the copper price go back up? Economists are divided, but many believe it will be back up within the next couple of years.
With the volatility and unpredictability of markets and economies at the moment, nothing is guaranteed, but it can be worth getting into a market when prices are depressed if it matches an investors’ portfolio goals.
What is copper used for?
Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.
Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.
How to invest in copper?
Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.
For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange
How to invest in a copper ETF?
Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.
In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.
There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).
How much is copper worth?
The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.
Since the start of 2022, copper has seen historically high prices. In Q1 and most of Q2, copper prices on the COMEX ranged between US$4.10 and US$4.89 — an all-time high. For the same time period on the LME, copper moved between US$9,000 and US$10,730. Q3 has brought lower prices for the metal, which has seen year-to-date lows of US$3.21 and US$6,998, respectively.
Where is copper mined and how is it processed?
Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2021, putting out 5.6 million MT of the metal. Rounding out the top five are Peru with 2,200 MT, China and the Democratic Republic of Congo with 1,800 MT each and the US with 1,200 MT.
Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.
The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.
Lastly, the copper is refined at a refining plant or smelter using one of two methods, pyrometallurgy and hydrometallurgy. Pyrometallurgy is employed for copper ore that is sulfide rich, while hydrometallurgy is used when the ore is oxide rich. The Investing News Network’s guide on copper refining goes into further detail about how those processes work. Once these processes are complete, the copper is concentrated to up to 99.99 percent purity.
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Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Western Copper and Gold is a client of the Investing News Network. This article is not paid-for content.
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