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.
Chilean state-own Codelco, the world’s largest copper producer, said Thursday its January-September profits climbed 27% compared to the same period last year, thanks mainly to the settlement of a heated legal dispute with diversified miner Anglo American (LON:ALL).
The deal allows Codelco to start developing one of the largest copper reserves in the world: the so-called district El Bronce-Río Blanco, where two key projects are located San Enrique Monolito and Los Sulfatos, with combined copper reserves of 2,100 million tonnes.
In a press conference, the copper giant announced this morning earnings of almost $7 billion before taxes, compared to $5.32 billion in the same period of 2011, reports local newspaper La Tercera (Spanish language).
Chief Executive Thomas Keller told reporters the company produced 1.188 million metric tons of copper, 5% less than in 2011 (1.25 million metric tons) due to declining ore grades.
The Chilean copper miner has recently announced bold expansion plans, including turning Chuquicamata — the world’s largest open-pit copper operation— into an underground mine. This project will extend the life of the mine by over 50 years, as Codelco has found reserves equivalent to nearly 60% of all the copper extracted in the mine’s history.
The underground section of the Chuquicamata mine is expected to start production in 2018.
Anglo American and Codelco made peace in late August with a multi-billion dollar deal that clearly favoured the Chilean miner.
The battle between the companies began in October 2011, when barely a week after Anglo American announced that the $2.8 billion Los Bronces investment would start to bear fruit, Codelco decided to exercise an option to acquire half of it.
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