The accommodative monetary policy, supply strains in South America, and the high demand for copper in China have been key drivers for the V-shaped recovery demonstrated by the copper industry. The iPathA Series B Bloomberg Copper Subindex Total Return ETN (JJC) has a year-to-date gain of 8.1% compared to the 7.5% gain of SPDR S&P 500 (SPY), which has been on a bullish run due to performance of tech stocks amid this pandemic. Moreover, JJC has gained more than 35% since its March lows.
Copper is used in construction, electrical applications, consumer products, transportation, and industrial machinery. The main demand for copper right now is in the electric vehicle industry. Copper has electrical conductivity, which is why it is used in electric vehicle technology. This includes charging stations and the batteries inside the vehicles.
Rio Tinto Plc (RIO)
This mining and metals company has approved an investment close to $200 million for the next stage of development of the lithium-borate Jadar project in Serbia. The project has the potential to supply a significant number of end-industrial products and supply borates across the world. The stock has grown more than 60% since its March low. In RIO’s second quarter, the company’s production increased in Pilbara iron ore (4% year-over-year), Bauxite (9%), and IOC iron ore pellets and concentrate (9%).
RIO’s Kennecott site in the US is the first producer to be awarded the Copper Mark, the copper industry’s new independently assessed responsible production program. The 2020 Argyle Pink Diamonds Tender, a collection of the rarest diamonds from a year’s production from the Argyle mine in the remote east Kimberley region of Western Australia, has strong demand and significant value.
The company also revealed the maiden Inferred Mineral Resource at the Winu copper-gold project in Western Australia and the discovery of a new gold dominant mineralization zone approximately 2 km east of the Winu deposit. Subject to regulatory approval, the company targets its first production for 2023.