Zijin Mining shares surged higher after the company said late Thursday it would commence operations at its copper and gold mine in Serbia.
The shares rose as much as 13% in early trade on Friday but have since pulled back and were last 8.2% higher, MarketWatch reports.
The Hong Kong-listed mining company said its project at the upper zone of the Cukaru Peki copper and gold mine had received permits from Serbia's mining and energy ministry and it will formally commence production.
The reserve volume of resources at the upper zone project, wholly owned by a Serbian subsidiary of Zijin Mining, are 1.28 million tons of copper and 81 tons of gold, it said. The project is designed to process 3.3 million tons of ore a year. Zijin Mining said the project is expected to produce 50,000 tons of copper and three tons of gold in 2021.
The news comes amid an increasingly tight copper market, according to Goldman Sachs. A significant shortage of the metal is expected in the fourth quarter and "global visible copper stocks could reach all-time lows by year-end," the investment bank said in a note. It expects copper prices to hit its end-year target of USD 10,500 a ton, it added. The three-month LME copper contract was last 0.5% higher at USD 10,035 a ton, MarketWatch reports.
According to an earlier statement by the minister of mining and energy of Serbia, Zorana Mihajlovic, Serbia will become the second biggest producer of copper and gold in Europe with the opening of the new mine.
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