The deadly coronavirus has taken a heavy toll on the world’s copper mines.

Output in key producer countries such as Peru cratered over the second quarter of 2020 as lockdowns and quarantine measures caused many mines drastically to reduce operations.

Recovery has been patchy. Peruvian mines had just about returned to normal run-rates by October, but output in Chile, the world’s largest copper producer, started sliding in the third quarter after a robust first half of the year.

Global mine output in the first 10 months of 2020 was still 0.5% lower than 2019 levels, according to the International Copper Study Group (ICSG).

What was supposed to be a year of mined supply growth turned out to be the second consecutive year of zero growth.

The resulting supply chain stress is manifest in this year’s benchmark smelter terms which are the lowest in a decade.

There is as yet no sign of a turnaround in the raw materials segment of the copper supply chain, suggesting full covid-19 recovery could be a protracted affair.

Falling benchmark

Treatment and refining charges, which are what a smelter levies for processing copper concentrates into refined metal, are the best indicator of what is going on in the opaque raw materials market.

And the message is clear. There’s not enough concentrate to go around.

The benchmark terms for this year’s shipments fell to $59.50 per tonne and 5.95 cents per pound from what was already a lowball $62.00 and 6.2 cents in 2019. They haven’t been this low since 2011, another year of mine supply stress, when they were settled at $56.00 and 5.6 cents.

Last year’s supply woes coincided with increased appetite in China as new smelters entered the competition for raw materials.

That should have translated into more concentrates imports. But after increases of 14% and 12% in 2018 and 2019 respectively, imports were down by 1% over the first 11 months of 2020 as smelters struggled to source material.

Unless there was a big rebound in December itself, 2020 could be the first year of lower concentrates arrivals since 2011.

An unofficial ban on Australian material hasn’t helped. Strained bilateral relations between Australia and China have impacted Chinese purchases of copper concentrates, which fell to zero in December.

However, Australia was only the fifth-largest supplier to China in 2019 and although constricted trade has exacerbated the tightness, the root cause has been covid-19 disruption, particularly in Peru.

What is normally China’s second top supplier after Chile saw mined copper production contract by 38% over April and May and by 14.5% over the January-October period, according to the ICSG.

Smelter squeeze

There is no sign of any short-term alleviation of the squeeze on smelter margins.

Indeed, it may be getting worse.

China’s Smelter Purchase Team, a grouping of some of the country’s biggest players, has lowered its floor purchase terms to $53.00 and 5.3 cents for the first quarter.

The Team has considerable negotiating muscle and its quarterly minimum terms are a strong signal as to the state of play in the concentrates market.

This quarter’s floor terms are down from $58.00 and 5.8 cents in the fourth quarter and from $67.00 and 6.7 cents in the first quarter of 2020.

Even this low first-quarter floor may be on the optimistic side, since Fastmarkets is assessing the spot market for copper concentrates at below $50.00 and 5 cents.

Quite evidently, copper mine production still has a way to go before satisfying smelter demand.

Long recovery?

Supply should improve as mine activity normalises along with everything else in the wake of covid-19 vaccination programs.

The ICSG’s October forecast was for world mined copper production to fall by 1.5% in 2020 but to come roaring back with 4.6% growth in 2021.

Things, however, may not be that simple.

Consider the case of the Las Bambas mine in Peru. Production last year was 311,000 tonnes of copper in concentrate, according to mine operator MMG Ltd.

The mine took a 70,000-tonne hit from a combination of COVID-19 restrictions on personnel, unplanned maintenance and, to a lesser degree, community road blockages.

Production recovered to pre-pandemic rates in the fourth quarter with onsite workforce levels “now in excess of 90% of normal, with expanded COVID safe accommodation options available at site and in local communities,” MMG said,

But last year’s disruption will have a long tail.

It was supposed to be “a year of transition for Las Bambas, with an intended focus on continuing to increase mining volumes to open up additional operating faces, completion of the third ball mill and the development of the (new) Chalcobamba pit.”

Most of that activity will now fall into this year “with a return to higher production volumes in following years,” according to MMG. Production in 2021 is expected to come in close to 2020 levels at 310,000-330,000 tonnes of contained copper before rising to 400,000 tonnes in subsequent years.

Although Las Bambas like other mines has learned to live with COVID-19, it has done so at the cost of deferring expansion work.

Long covid-19

When copper smelter terms were last this low – 2010 and 2011 – the copper price was at record highs.

That was no coincidence. The world’s miners were collectively blindsided by the strength of China’s demand for industrial metals. Their inability to respond saw tightness in the concentrates segment of the supply chain transmitted into the refined metal section.

With Chinese demand again booming and analysts looking for a strong pick-up in demand from the rest of the world on the back of “green” technology roll-out, copper mine supply needs to react.

However, if Las Bambas is indicative of operational stresses in the rest of the sector, production is not going to miraculously snap back to pre-pandemic levels this year.

Just as the world starts to consider the effects of “long COVID-19” on human health, the copper market needs to start doing the same for mine supply.

(Editing by David Evans)

Ulaanbaatar /MONTSAME/ The Government of Mongolia is urging the Oyu Tolgoi project investors to revise the Oyu Tolgoi Investment Agreement signed in 2009 and terminate the Oyu Tolgoi Underground Mine Development and Financing Plan, known as ‘Dubai Agreement’, according to the statements made by Acting Minister of Justice and Home Affairs Kh.Nyambaatar and Deputy Chief of Cabinet Secretary B.Solongoo, when they today met Member of the Parliament S.Ganbaatar, who has gone on hunger strike, demanding Oyu Tolgoi agreement termination.

Acting Minister Kh.Nyambaatar said, “ We have received Oyu Tolgoi Project Financial Model 2029. Oyu Tolgoi project sales revenue is projected to increase when the underground mine operations begin in 2023 and reach USD 29 billion by 2029. According to the financial model, USD 10 billion of that sales revenue will cover operational costs. USD 12 billion out of the remaining USD 19 billion is reported to be written off for the depreciation. Per the model, we will have to pay USD 3 billion in loan after the remaining USD 6.3 billion is used for the repayment of the investment. Therefore, actions are being taken in phases to have experts conduct an independent review and determine the legal framework for the agreement termination.”

“The working group in charge of the agreement revision has successfully convened several times. During its talks with Rio Tinto executives on December 18, 2020, the working group urged them to terminate the Dubai Agreement and completely revise the 2009 Investment Agreement rather than improving it. January 18 saw a virtual meeting with the investor side where it was stated that the Investment Agreement may be terminated as a last resort if the Mongolian Government’s demand is not accepted. To make the project beneficial to Mongolia, the government is ready to work with MP S.Ganbaatar and have him join the working group.”

Cabinet Secretariat Deputy Chief B.Solongoo said, “The Government imposed a MNT 350 billion tax penalty on Oyu Tolgoi LLC in 2018 and a MNT 650 billion tax penalty in 2020. The company refused to make the payment and took the case to an international court. The Government of Mongolia must file an answer to the court within February 21, 2021. We are working to give a reasonable answer. The extensive working group set up by the Government is working with three sub-groups”

As the second largest landlocked country in the world after Kazakhstan, Mongolia has a very distinctive climate. Just like neighbouring areas such as southern Russia to the north and northern China to the south, Mongolia’s climate is characterised as continental, as opposed to the maritime climate of locations closer to the sea or ocean.

In practice, this means long and very cold winters, with average temperatures in the capital, Ulaanbaatar, staying well below freezing from November through to March, and reaching lows of almost -50C. In contrast, summer temperatures are in the low 20s, and can reach peaks of 36C.

Precipitation in the capital is almost nonexistent in winter, with virtually no snow. In the summer months, from June onwards, there is a small amount of rainfall, but the annual total here is just 200mm (less than 8ins).

Most of the country is covered with desert plains (in the south) and steppe grasslands (in the north and east, where there is a slightly higher rainfall). But in the west and north, mountain ranges rise to over 3,000 metres (roughly 10,000ft). The peaks are often covered with a light dusting of snow, and occasionally there is a heavier fall.

The Mongolians have got strong female talents and their next generation are among Asia’s best boxers. Their next big international hope could be the 12-year-old Lham Tsendbaatar who won already national events in Mongolia and increased her training sessions to accomplish her future goals in boxing.

The Asian Boxing Confederation’s new PR campaign, the ASBC Future stars have been introducing the continent’s best hopes and young talents focusing to the new wave of the boxers. Mongolia has got less than 2,000 boxers altogether in all age groups but the quality of their athletes are very high and they are always competitive in the ASBC Asian Boxing Championships.

Mongolia’s new female hope Lham Tsendbaatar was born in the capital city of the country in Ulaanbaatar in 2008. She began boxing at the age of 9 in Mongolia and after three and half years of experiences, Tsendbaatar is a well-trained talent. The Mongolian talent trains every day at least two-times to reach the top level of the Asian boxers in the near future. Her elder brothers are also boxers and have got good potential in our sport.

Her coach is Mr. Yerkin Jamantai who reached several strong results as a boxer in the international stage besides to his national titles in Mongolia. Lham Tsendbaatar claimed the gold medal in the recent two editions of the Mongolian Kids National Championships where she dominated all of her contests against mostly older rivals. Mongolia’s first ASBC Asian Women’s Junior Champion 17-year-old Tugsjargal Nomin-Erdene also trains in her club together with coach Mr. Yerkin Jamantai.

The Mongolian girl can join to the international schoolgirls events in 2021 and her first goal is the annual opening edition of the ASBC Asian Schoolgirls Boxing Championships. Lham Tsendbaatar could be Mongolia’s weapon at the 2026 Youth Olympic Games which is her main long-term target in our sport. Mongolia’s female boxing life delivered its success at the 2018 AIBA Women’s World Boxing Championships where Nandintsetseg Myagmardulam bagged bronze medal. Mongolia hosted the 2019 edition of the ASBC Asian Youth Boxing Championships where the country claimed eight medals on home soil.

Jan. 26 (Xinhua) -- Mongolia recorded 13 more locally transmitted COVID-19 cases in the past 24 hours, bringing its national tally to 1,656, the country's National Center for Communicable Diseases (NCCD) said Tuesday.

"A total of 12,039 tests for COVID-19 were conducted across Mongolia yesterday and 13 of them were positive," said Amarjargal Ambaselmaa, head of the NCCD's Surveillance Department, at a daily press conference.

Two of the latest confirmed cases are health workers of the NCCD, and the others are people who had close contact with previously confirmed cases in the country's capital, said Ambaselmaa.

Meanwhile, 42 more patients recovered from the disease, bringing the total to 1,211, she added.

The Asian country, with a population of around 3.3 million, has recorded two COVID-19 deaths so far. Enditem

Ulaanbaatar /MONTSAME/ In coming four years, the Ministry of Environment and Tourism plans to focus on recovering tourism industry by reviving tourist flow in a short time after the pandemic. In doing so, it aims to boost tourism based on each regional features, increase jobs in rural areas, improve citizens’ livelihood and reduce adverse impacts on nature and environment caused by tourism.

First of all, a program on post-pandemic recovery in tourism industry will be implemented in partnership with the United Nations World Tourism Organization. And in cooperation with well-known experts, a plan has been developed to introduce international good practices into domestic tourism based on its specialties, said S.Bayasgalan, Head of Tourism Policy and Cooperation Department of the Ministry.

Due to the pandemic, tourists are being afraid of getting infected during their travel. Therefore, it is crucial to keep tourism products and services safe, satisfy requirements as well as to get all tourism entities confirmed with international safe tourism certificate and promote to the market.

After re-opening the country’s border, a project will be realized to boost borderline tourism. Aside from tourists entering through land border checkpoints, tourist flow will be increased with creation of short distance flights. It is also possible to raise the number of tourists to come from other destinations. There are two big tourism clusters to be developed in Mongolia. First one is Altai tourism cluster which covers four countries including Mongolia, Russia, China and Kazakhstan and the second one is Gobi tourism cluster, which includes Gobi region in China, she added.

BEIJING (Reuters) - COVID-19 outbreaks in northern China will have some impact on industries but will not lead to manufacturing shutdowns, said Huang Libin, an official at the Ministry of Industry and Information Technology, at a media briefing on Tuesday.

Reporting by Stella Qiu and Ryan Woo; Editing by Tom Hogue

Jan. 25 (Xinhua) -- Mongolia recorded 16 more locally transmitted COVID-19 cases in the past 24 hours after 7,065 tests were conducted across the country, the National Center for Communicable Diseases (NCCD) said Monday.

The latest cases were detected in the country's capital Ulan Bator, including one in a worker of the health ministry, Amarjargal Ambaselmaa, head of the NCCD's surveillance department, said at a press conference.

Meanwhile, 20 more patients have recovered from the disease, said Ambaselmaa.

Noting a high risk of COVID-19 infection in Ulan Bator, Ambaselmaa urged people to maintain good personal hygiene habits, and stay at home and not go out unless absolutely necessary.

So far, Mongolia has confirmed a total of 1,643 COVID-19 cases with 1,169 recoveries and two deaths. Enditem

Ulaanbaatar/MONTSAME/. The National Development Agency (NDA) and the German Corporation for International Cooperation (GIZ) have agreed to implement a project entitled ‘Promotion of Growth and Employment in the Private Sector’.

The project will be funded by the German Ministry of Economic Development and Cooperation (BMZ) at a cost of EUR 4,500,000 and will run for three years, starting in January 2021.

The main goal of the project is to increase employment and create new jobs by supporting the economic stability or immunity of micro, small and enterprises and startups.

Source: National Development Agency of Mongolia

Mongolia has picked the drama Veins of the World from director Byambasuren Davaa as its official entry for the 2021 Academy Awards in the best international feature category.

The film follows Amra, an 11-year-old boy living a traditional nomad life on the Mongolian steppe who sees his way of life threatened by the encroachment of international mining companies, who are devastating the natural habitat in their search for gold. Amra's father Erdene is the leader of the last nomads opposing them. When he dies, his son decides to take up the fight.

Veins of the World premiered at the Berlin Film Festival last year. Telepool's Global Screen is handling international sales. The Mongolian title is a late entry into the Oscar race. Academy members will vote Feb. 1-5 on the 2021 shortlist, which this year will include 15 international features.

But Davaa is no stranger to the Oscars. Her debut, The Story of the Weeping Camel, was nominated in the best documentary feature category in 2005. She also won acclaim for The Cave of the Yellow Dog and Two Horses of Genghis Khan, two other documentaries set among Mongolian nomad communities. Veins of the World is her feature film debut.

Commenting on the film's Oscar submission by Mongolia, Davaa noted that the environmental issues raised by Veins of the World "have long become a global issue, not just a local one."

After its Berlin debut, Veins of the World was picked up by several international distributors, including Les Films du Preau in France, Surtsey Films in Spain and Angel Films for Scandinavia. Pandora Film will release the movie in German later this year.

The nominations for the 93rd Academy Awards will be announced on March 15. The 2021 Oscar ceremony is scheduled for April 25.