When commodity prices are soaring, a mining company will go to extra lengths to boost its production levels.
This includes reclaiming minerals from waste, which is becoming more and more popular in a mining industry keen to improve its environmental performance.
“Miners are pretty good at squeezing incremental copper out,” Metals Acquisition Limited chief executive officer (CEO) Mick McMullen told Australian Resources & Investment. “If copper runs to $US6.50 a pound, I’ll be mining everything.
“Our waste … is running 1.8 per cent copper. If copper is at $US6.50 pound, I’ll work out some way of getting copper out of that waste.
“You get a fair bit of substitution (when commodity prices surge) and … you’d be surprised at how much scrap comes back to market that wasn’t in peoples’ forecasts.”
Metals Acquisition recently purchased the CSA copper mine near Cobar in NSW from Glencore, which has historically produced about 40,000 tonnes per annum (tpa) of copper.
McMullen said Metals Acquisition hopes to achieve 50,000 tonnes of annual copper production from CSA in 2024, with longer-term aspirations to boost this to 55,000tpa.
When asked where he sees copper prices going in the years to come, McMullen doesn’t get carried away.
“I think copper should trade between $US4 and $US5 a pound with the odd excursion above and below that,” he said. “Can it go above $US5? Yes. But do I see it going to $US6 and staying there? Probably not.
“Fundamentally, copper should go higher. But am I one of these people that thinks copper can only go to the moon? I tend to moderate people a little bit.”
Copper has a strong demand profile in the years to come as the renewable energy transition intensifies. The base metal has been labelled “the metal of electrification” such is its importance in the manufacturing of electric vehicles, solar panels and wind turbines.
Metals Acquisition is listed on the New York Stock Exchange but is also gearing up for a dual listing on the ASX.
McMullen said listing Metals Acquisition in Australia was a logical choice given the location of the CSA mine and the lack of pure-play Australian copper miners currently listed on the ASX.
The company looked at about 80 assets before settling on CSA, which is high grade but low productivity – a project right within McMullen’s sweet spot.
“If you look at our background, I’d spent most of my career overseas,” McMullen said. “So I spent a decade in North America, doing turnarounds on much larger businesses, and, you know, we like turnaround stories.”
McMullen was influential in revitalising the Stillwater mine in Montana, US, which has a mine life until 2053. Before being appointed CEO of Metals Acquisition, McMullen was CEO and president of Detour Gold Corporation, a 600,000-ounce-per-annum gold producer in Canada.
“We bought CSA, which is certainly not the most productive mine in Australia, but it is high grade,” McMullen said. “And that’s what we do – we’re turnaround specialists. We fix the cost base and get more out of the existing infrastructure.
“We didn’t want to do a development asset in the current cost environment. We wanted to take an existing mine where the capital has been sunk and capitalise on that.”
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