Australian Research and Development Aurelia Metals (ASX: AMI) announced on Friday that it has begun talks with the mining and merchandise trader Glencore (LON: GLEN), which it hopes will lead to the acquisition of a CSA mining company by the Swiss company.
"The high-level company's assessment is that the CSA mine could potentially be strategically suited for the company, in accordance with our general view that further consolidation in Kobar is potentially attractive," Aurelia said in a statement.
The CDS underground mine, located in the state of New South Wales, produced 48,000 tonnes of copper concentrate last year. It has a productive span of five years and ore reserves last about ten, according to Glencore's reserves and resource report.
The CSA copper mine, located in the state of New South Wales, produced 48,000 tonnes of copper concentrate last year
Aurelia, which develops the nearby Hera-Nimage project in western New South Wales, is not the only company that has expressed interest in CSA.
Last month, fellow junior Aeris Resources (ASX: AIS) offered Glencore a $ 575 million for the operation, but the parties were unable to reach an agreement.
News for the talks between Aurelia and Glencore comes at a time when companies are struggling to take copper funds due to the expectations that major energy networks around the world and the boom of electric vehicles will increase demand, while deliveries will remain limited.
However, CRU industry analysts say online major projects are coming – Quellaveco (2022) of Anglo, Teck's Quebrada Blanca expansion (2021) and Cobra Panama on the First Quantum (already in production) will currently eliminate the gap between supply and demand.
The research group has lowered its forecast deficit and now expects the market to be in a small surplus this year and the next, but short again for 250,000 tons by 2023.