SHFE Base Metals Warrants (2017-10-17)

Mongolia’s government said on October 11 that Prime Minister Nyam-Osor Uchral had called for faster progress on the copper smelting and refining project based at Erdenet Mining Corporation, with contract negotiations to be completed by the end of November 2026. The proposed US$772 million facility is designed to process 560,000 tonnes of copper concentrate and produce 124,000 tonnes of cathode copper annually. China’s NFC has been selected as the strategic investor, with financing, ownership and construction contract terms still under negotiation. The feasibility study, detailed environmental impact assessment and related technical documents have been approved. Approximately US$68 million has been invested in infrastructure for the industrial and technology park, with the first phase in service and the remaining infrastructure scheduled for completion in 2027. No commissioning date has been announced for the smelter itself. The project would expand domestic processing of Erdenet’s copper concentrate, with contract completion, financing and construction progress remaining key milestones.

A newly disclosed lawsuit filed by BHP Group’s wholly owned Spence copper-molybdenum mine estimates that stoppages on June 30–July 1 and July 7–8 cut contained-molybdenum output by 2 metric tonnes. The company also claims losses of 400 metric tonnes of copper cathode and 167 metric tonnes of contained copper in concentrate. Using July molybdenum sales of 74.76 metric tonnes and revenue of 5.48 million United States dollars, Spence derived an average price of 33.24 dollars per pound and valued the lost molybdenum at about 146,545 dollars. This is a newly quantified historical loss, not a new October shutdown; the figures remain allegations in a lawsuit and have not been adjudicated.