First Quantum doubles profit while Intact bleeds on catastrophe claims
Copper prices above US$4.50 a pound can hide a lot of operational problems. First Quantum Minerals reported second-quarter profit of $487 million, more than double the $231 million it earned in the same quarter last year. The driver wasn't efficiency. It was metal. Copper averaged $4.72 per pound during the quarter, up from $3.84 a year earlier, and First Quantum's Panama mine, shut down by the government in 2023, stayed shut. Production came entirely from its remaining assets in Zambia, Australia, and Spain.
The company is still running on borrowed momentum. Copper demand from electrification projects and data center buildouts has kept prices elevated, but First Quantum hasn't replaced the 300,000 tonnes of annual output it lost when Panama closed Cobre Panamá. The Zambian operations are carrying the load, and Zambia's own political and tax environment has been anything but stable. The profit jump reads well. The production base underneath it is narrower than it was three years ago.
Intact's quarter was the opposite problem
Intact Financial reported net operating income of $346 million, down from $554 million a year earlier. Catastrophe claims hit $742 million in the quarter, more than double the $307 million the prior year. Hailstorms in Calgary. Wildfire smoke damage across Ontario and Quebec. A late-spring windstorm in southern Ontario that alone cost the industry over $400 million.
Intact has spent the last decade acquiring scale and tightening underwriting, and it still got hammered. The combined ratio, claims and expenses as a percentage of premiums, came in at 95.1%, up from 88.3% a year earlier. Anything under 100% is technically profitable, but 95% leaves almost no room when the next convective storm rolls through.
The gap between these two results is the gap between leverage to a global commodity cycle and exposure to localized physical risk that no amount of reinsurance fully smooths out. First Quantum's profit is a price story. Intact's loss is a weather story. One you can hedge. The other just keeps arriving.
Copper prices above US$4.50 a pound can hide a lot of operational problems. First Quantum Minerals reported second-quarter profit of $487 million, more than double the $231 million it earned in the same quarter last year. The driver wasn't efficiency. It was metal. Copper averaged $4.72 per pound during the quarter, up from $3.84 a year earlier, and First Quantum's Panama mine, shut down by the government in 2023, stayed shut. Production came entirely from its remaining assets in Zambia, Australia, and Spain.
The company is still running on borrowed momentum. Copper demand from electrification projects and data center buildouts has kept prices elevated, but First Quantum hasn't replaced the 300,000 tonnes of annual output it lost when Panama closed Cobre Panamá. The Zambian operations are carrying the load, and Zambia's own political and tax environment has been anything but stable. The profit jump reads well. The production base underneath it is narrower than it was three years ago.
Intact's quarter was the opposite problem
Intact Financial reported net operating income of $346 million, down from $554 million a year earlier. Catastrophe claims hit $742 million in the quarter, more than double the $307 million the prior year. Hailstorms in Calgary. Wildfire smoke damage across Ontario and Quebec. A late-spring windstorm in southern Ontario that alone cost the industry over $400 million.
Intact has spent the last decade acquiring scale and tightening underwriting, and it still got hammered. The combined ratio, claims and expenses as a percentage of premiums, came in at 95.1%, up from 88.3% a year earlier. Anything under 100% is technically profitable, but 95% leaves almost no room when the next convective storm rolls through.
The gap between these two results is the gap between leverage to a global commodity cycle and exposure to localized physical risk that no amount of reinsurance fully smooths out. First Quantum's profit is a price story. Intact's loss is a weather story. One you can hedge. The other just keeps arriving.
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