Copper market braces for supply shifts as DRC flood repair and Panama export plans progress

Moves to clean up a flooded copper mine in the Democratic Republic of Congo (DRC) and Panama’s decision to allow a controversial project to export ore are both being closely monitored by copper market followers.

The Kamoa-Kakula mine in the DRC, a major supplier of copper to global markets, has been significantly impacted in recent weeks.

Seismic activity caused widespread flooding deep below ground at the site.

Underground pumping

The Ivanhoe Mines-operated project was on course to become the third-biggest supplier of copper this year.

However, the company suspended operations at the project on 20 May after the mine owner opted to bring in engineering experts to safely and conservatively restart mining.

Ivanhoe says it is now on track to recommence operations with the successful installation of additional underground pumping to stabilise water levels.

Updated plans

The project’s engineering teams are currently updating short-, medium- and long-term plans to resume operations on both the western and eastern sides of the Kakula mine.

Subject to their progress with dewatering, Ivanhoe expects to restart underground mining later this month on the western side of the mine.

This section remains dry and is supported by over 1,000 litres per second of operational pumping capacity.

Panamanian surprise

Meanwhile, the Panamanian government has surprised market watchers with news that it will allow the controversial Cobre mine to export more than 120,000 tonnes of previously mined copper concentrate.

The First Quantum Minerals copper operation closed more than a year ago.

However, the government has now given the green light for the sale of the concentrate to pay for the costs of maintaining the inactive mine site.

Large part of GDP

Income from the mine accounted for nearly 5% of Panama’s gross domestic product (GDP) in the final year in which it operated.

“The purpose is to avoid, above all else, environmental damage,” Trade and Industry Minister Julio Moltó said.

He confirmed that the mine was not reopening and said the plan would ensure the site remained safe.

Volatile period

Copper prices have had a roller-coaster ride recently on the back of tariff implications but analysts and leading mining companies believe it will be a major player in the energy future.

BHP Group (ASX: BHP), for one, has identified copper as a key critical metal for the move to clean energy and the US government recently awarded fast-track status to the BHP- and Rio Tinto (ASX: RIO)-operated Resolution copper project in Arizona.

Resolution, one of the largest copper deposits in the US, would be capable of supplying 25% of annual domestic demand for the next four decades.