This Morning in Metals: Mining Company Looks to Dig Deeper for Copper

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This morning in metals news, mining company Rio Tinto PLC is planning on digging deeper underground for copper, a metals trader who pleaded guilty to fraud charges last week is cooperating with U.S. prosecutors in an investigation of trading practices at the the world’s biggest banks and the Justice Department is seeking to dismiss a lawsuit filed by mining company Twin Metals Minnesota, which is seeking the reinstatement of federal leases so it can operate on land in northeastern Minnesota.

Rio Tinto PLC Eyes Mid-2020s for $6-8B Mining Operation

As readily mineable copper supplies dwindle, one company has decided to simply dig deeper.

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Mining company Rio Tinto PLC is preparing for a new mining operation, estimated to cost $6 billion to $8 billion, which will seek to dig about a mile underground, the Wall Street Journal reported. According to the article, the Arizona mine — which is pending regulatory approval — could meet the demand of approximately one-fourth of U.S. demand.

While cost-intensive, dwindling copper supplies near the surface could prompt other companies to follow suit. Rio Tinto’s operation, however, won’t get underway for a while — assuming regulatory hurdles are cleared — as it’s expected to open in the mid-2020s.

Former Deutsche Bank Metals Trader Cooperating With Justice Department Investigation

After pleading guilty to fraud charges last week, David Liew, formerly a metals trader for Deutsche Bank in Singapore, is aiding the Justice Department investigation into the metals trading practices of several large global banks.

Liew and his colleagues used fake orders to manipulate metals prices, a practice called “spoofing,” according to a Bloomberg report.

According to documents obtained by Bloomberg, the investigation states that Liew was taught how to push prices to benefit traders with client orders to fill. Liew then passed those techniques on to others.

The documents state Liew attempted to move prices on Chicago’s CME more than 300 times before he left Deutsche Bank.

Justice Department Aims to Dismiss Minnesota Mining Company’s Lawsuit

The Justice Department is moving to dismiss a lawsuit filed by mining company Twin Metals Minnesota. The lawsuit seeks to reverse the withdrawal of federal mining leases to the company, according to the Duluth News Tribune.

The company is seeking the permits to continue work and planning for a mining operation in northeast Minnesota. Near the end of the Obama administration’s term, the leases were pulled and a mining moratorium was placed on a buffer area around the Boundary Waters Canoe Area Wilderness (which is near the proposed mining site). The Interior Department and Department of Agriculture cited potential acid mine runoff into the nearby wilderness area’s watershed as the reason for the withdrawal of the leases.

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Now, Justice Department lawyers have filed motions to dismiss the company’s lawsuit, an action that would seem to stand against President Donald Trump’s public pro-mining stance.

What the relevant federal government agencies do going forward will offer a test of the government’s cohesion — that is, whether Trump’s spoken stances about things like mining will filter down to the relevant policy-making units and become enacted in practice.

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