At investment conference, PolyMet predicts profitability, Buffalo Wild Wings touts experiments
PolyMet Mining Corp.’s proposed copper mine in northern Minnesota, which could open next year as a lengthy permitting process nears completion, would still be profitable amid a recent plunge in metals prices, the company’s financial chief said Wednesday.
Copper prices fell to a six-month low on Monday, weighed down by slowing economic growth in China, the world’s largest consumer of metals, and broader pressure on commodities from coal to corn to gold.
In a presentation at InvestMNt, the annual conference of the CFA Society of Minnesota, PolyMet Chief Financial Officer Douglas Newby said prices for copper are still well above the company’s break-even point.
“If we were in operation today, we would be making money even with the pressure on commodities and metals,” Newby told the audience of analysts and institutional investors.
Each year, several hundred investment professionals gather for the one-day conference, where about 50 of the state’s publicly traded companies, along with a handful from elsewhere, provide updates on their performance. This year, 3M Co. presented for the first time and attendees also had the chance to listen to sessions on public debt.
Though its project to revive a former steel plant and iron mine near Hoyt Lakes has generated headlines for more than a decade, St. Paul-based PolyMet is relatively small among Minnesota’s listed companies, with a market capitalization of $255 million.
For years, it has subsisted on capital from investors led by Glencore, the Swiss mining giant, which has $170 million exposure to the firm in investments and loans. As environmental reviews near an end — the Environmental Protection Agency is expected to give its final approval in November, triggering the state permit issuance process — interest is starting to grow in the company’s financial potential.
Newby said that, while there are many influences on profitability, in general PolyMet needs copper to be priced somewhat over $1 a pound to break even. Even with a drop of about 20 percent in copper prices over the past two months, the metal is still being traded at about $2.30 a pound.
Asked whether the company’s output would put more pressure on copper prices, Newby suggested its production would be too small for that. “I don’t think we’re a day’s worth of annual global consumption,” he said.
The project is one of four copper mines proposed for the Iron Range northwest of Duluth, though it is the only one with a mill and is positioned to help others process copper ore.
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