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.
Workers at he world’s third-largest copper mine, Chile’s Collahuasi, approved Friday a new, early contract offer to be signed next week, which will replace the current agreement, due to expire in April 2014.
According to union leaders contacted by local newspaper La Tercera (in Spanish), the new four-year deal grants miners a 3.5% salary hike, a $31,900 bonus and a loan worth $6,000.
Collahuasi has been seeking to turn the corner after a tough 2012. The deposit produced around 282,100 tonnes of red metal last year, tumbling roughly 37.8% from 2011 levels, based on figures provided by state copper commission Cochilco.
The mine, own by Global miners Anglo American PLC (LON:AAL) and Glencore Xstrata (LON:GLEN) with a 44% stake each and a consortium of Japanese companies led by Mitsui & Co. (TYO:8031), which holds a 12% ownership, is contemplating expansion plans that seek to double its annual production.
Collahuasi was hit last year by a combination of work stoppages, heavy rains and fatal accidents, prompting Anglo, Glencore Xstrata and Mitsui to step in.
Today’s news, believe analysts, should lessen the state of fear among copper investors, who have seen fresh threats to global supply emerge in the last few weeks. Three major copper producers have halted operations: Freeport-McMoRan Copper & Gold’s (NYSE: FCX) Grasberg mine in Indonesia, Rio Tinto’s (ASX, LON: RIO) Bingham Canyon mine in the US, and China’s JinchuanGroup Gansu copper plant. And yesterday, Rio’s $6.6 billion Oyu Tolgoi mine inauguration was delayed as the company did not get all the necessary permits from Mongolian authorities.
