Copper market’s biggest whale fuels speculation of a major shift
The world’s single biggest buyer of copper, State Grid Corp. of China, has slowed its purchases of copper wire this year.
Codelco chairman Maximo Pacheco said on Wednesday the Chilean state-run company’s copper production is expected to start recovering next year as it overhauls its mining operations.
Copper output from Codelco’s operationsfell in 2022 to the lowest level in 25 years, exacerbated in part by delays to key projects for extending the life of its mines.
“Are we worried about the drop in production? Yes. Is production going to keep falling? No,” Pacheco said at an event in Santiago.
He noted that 2023 would mark the “worst” year for Codelco over the next five years, with production “gradually” increasing until hitting 1.7 million metric tons in 2030.
Codelco recently cut its production forecast for this year to between 1.31 million and 1.35 million tons.
Pacheco said Codelco’s mine plan overhaul would address the factors holding back production, including plants that were being operated at a capacity “far superior” to the mineral grade being mined.
The delay in so-called structural projects under development – and their mounting costs – is one of Codelco’s greatest challenges as it seeks to compensate for the drops in mineral grades and extend the useful life of its old deposits.
Pacheco said further delays would be “a mistake,” and he again dismissed calls for the privatization of the company.
Codelco is in the process of adjusting its budget for the projects under development, Pacheco said, though there is no estimate yet of how much more they will cost as input costs have increased as well.
The company has some of the highest input costs for miners in Chile, which is the world’s largest copper producer. Pacheco said the firm was looking for ways to become more competitive.
(By Fabian Andres Cambero; Editing by Jan Harvey and David Holmes)
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