Newcrest declares force majeure on Cadia contracts following dam breach

Newcrest Mining Ltd has declared force majeure on contracts for copper concentrates supply from its Cadia mine, where operations have been shut since March 10 due to a collapsed tailings dam.

The Australian company sent notifications to customers on Wednesday March 14 that it could not guarantee contractual supply of copper concentrates, two sources, who declined to be named, said.

A spokesman for Newcrest declined to comment, while referring to a statement made on Monday indicating that 2018 guidance would be adversely affected. 

Newmont is in the process of reviewing its tailings facility at Cadia in New South Wales, Australia, where a tailings pool dam collapsed on Friday March 9, and is looking at possible alternative locations to store mining residues.

Cadia produced 63,805 tonnes of copper in concentrate in 2017. The immediate effect on the copper concentrates market and spot treatment and refining charges (TC/RCs) is as yet unclear, sources said.

“It remains a question in the market as to how long Cadia will be out, but we’re not expecting a long absence,” one source said.

“Some smelters have nearby shipments due from Cadia and if the force majeure lasts a long time, there will be an impact [on the market],” a second source said.

Copper concentrate TC/RCs fell in the first quarter of 2018 as the market priced in potential mine disruptions from labour negotiations in Chile. 

Metal Bulletin’s copper concentrate index fell to a multi-year low of $68.80 per tonne/6.88 cents per lb at the end of February.

What to read next
Market reactions to the soon-to-be-implemented US copper tariff are driving short-term volatility and supply imbalances while fuelling long-term efforts to expand domestic production, recycling and infrastructure.
US export controls on recycled copper would have unintended consequences that could weaken the country’s domestic recycling and manufacturing ecosystems, the president of the Recycled Materials Association (ReMA) said.
The publication of Fastmarkets’ assessments for nickel 4x4 cathode, nickel briquette and nickel uncut cathode premiums in-whs Rotterdam was delayed on Tuesday July 16 because of a reporter error.
Fastmarkets has corrected its alumina index inferred prices, which were published incorrectly on Tuesday July 15.
The United States' copper recycling industry is ramping up pressure on policymakers to impose some form of export controls on high-purity copper scrap, arguing that current trade dynamics – particularly with China – are distorting prices, weakening domestic capacity and undermining national security goals.
Fastmarkets launched two new price assessments for Indonesia’s domestic trade in nickel ore on Tuesday July 15. The two price assessments are for domestic trades of Indonesian laterite ores with 1.6% and 1.2% nickel content. Indonesia now accounts for 60% of the global nickel supplies and while there is an official government reference price, known […]