Sprott global investment manager specializing in precious metals and real assets has launched its new $100 million Physical Copper Trust, which would operate similarly to physical gold ETFs.
The new investment asset, which the company called “the world’s first physical copper fund,” was introduced at the Toronto Stock Exchange recently. The Sprott copper fund will use the funds raised to buy copper directly from mining companies and trading houses, which will then be stored in warehouses across Europe, North America and Asia.
The total volume of physical copper held by the trust would amount to 8,000 - 10,000 tons, compared to inventories on the London Metal Exchange of 122,200 tons and on Comex of less than 15,000 short tons. The annual global copper production amounts to around 22 million tons.
“The trust will address a need in the market by providing investors with an alternative to holding copper futures,” said Sprott CEO John Ciampaglia.
According to Bloomberg, funds that allow investors to buy and hold physical copper have stirred controversy in the past. In 2012, US manufacturers petitioned the Securities and Exchange Commission to ban the creation of such funds arguing the investment vehicles would leave less metal available, creating shortages and boosting prices.
Meanwhile, Sprott’s physical uranium trust was blocked from listing in the US in 2022 after a failure to meet listing standards. Nevertheless, it has bought more than $2.2 billion of the metal since its inception and now has net assets of nearly $6 billion.
Theodor Lisovoy, Editor in Chief, Rough&Polished
