Extended lockdowns to hit copper production

The announcement comes after six workers at Fortuna Silver Mines’ (NYSE: FSM) Caylloma operation in southern Peru also tested positive for covid-19.

Peruvian President Martin Vizcarra has extended the country’s lockdown and travel restrictions to May 10, while the effects of a copper supply shock remain to be seen.

China, the world’s top metals consumer, boosted copper imports year-on-year in March, but still faces challenges as miners have reduced shipments or suspended operations.

Data analytics firm GlobalData forecasts copper output growth of 1.9% this year, compared to the original forecast growth rate of 3.4%.

Copper prices in London on Monday rose to their highest in nearly six weeks. Benchmark three-month copper on the London Metal Exchange (LME) rose as much as 2.3% to $5,260 a tonne, its highest since March 17.

• On Monday, Freeport’s El Abra copper mine in Chile also announced it would scale back copper processing by 40% as global prices for the red metal plunge amid the coronavirus pandemic. The mine, located in the province of El Loa in northern Chile, is one of two copper mines operated by Freeport in South America. The world’s largest publicly traded copper producer, said on Friday it would cut its 2020 costs by 18%, or $1.3 billion, as prices for the red metal plunge.

• Copper giant Codelco was also hit by delays in upgrades and expansion projects caused by measures to stop the spread of the novel coronavirus.

• Australia-based MMG saw copper production decline 20% in the first three months of the year, compared to the same period in 2019, after declaring force majeure at its Las Bambas mine in Peru amid coronavirus-related restrictions.

• Anglo American’s Los Bronces copper mine in Chile, outside the capital Santiago, saw output tumble 25% to 68,700 tonnes, battered primarily by a worsening drought in the region.

• Grupo Mexico, the third-largest copper producer in the world through its subsidiary ASARCO, registered a net loss of $369.2 million during the first quarter of 2020 in a sharp reversal from the same period a year ago. The largest mining company in Mexico recently reduced its mining operations to comply with government orders to suspend non-essential activities.

• Vale (NYSE: VALE) has extended the care and maintenance period at its Voisey’s Bay mine in Labrador, Canada, for up to three months.