Chile’s state-run copper miner Codelco is poised to improve production this year and begin to climb from its lowest dip in a quarter century, the head of Chilean copper studies center CESCO said ahead of a major industry conference that starts Monday.
Codelco is aiming to produce between 1.325 million and 1.390 million metric tons of copper this year, a target that at best would see it lightly overtake its 2023 output of 1.325 million metric tons.
That goal appeared realistic, said Jorge Cantallopts, head of the Center for Copper and Mining Studies (CESCO) in Chile, the world’s top producer of the red metal.
“We think that the level of production for this year will be better than the last one,” he said in an interview on Friday.
Output could rise at Codelco’s Andina, Salvador and Chuquicamata mines, he noted, even as challenges continue for structural projects – mega projects designed to extend the life of key mines and compensate for a drop in ore grades.
They include a $5 billion revamp of Chuquicamata, a project that Reuters found has suffered delays, collapses and construction difficulties.
CESCO last year warned that the company, which represents about a quarter of Chile’s copper output, could become insolvent if it didn’t meet production promises.
The center annually hosts CESCO Week alongside the CRU World Copper Conference, which make up the largest gathering of industry executives, investors and analysts.
Driven by renewed interest in commodity assets, copper prices rallied 10% since the start of this year on London Metal Exchange. Copper prices also hit record high on Shanghai Futures Exchange (Shfe) and neared a two-year high of $4.34 per pound last Friday on Chicago Mercantile Exchange.
When prices hit $4.50 per pound, it could start to hurt copper demand, Cantallopts said.
Some signs are already showing. Copper inventory in China, the top consumer of the industrial metal, typically declined every April as factory activity picked up after Lunar New Year.
But copper inventory is yet to retreat so far, remaining at multi-year high of close to 300,000 metric tons.
Even so, if mined copper supply constraints held steady for the medium term, Cantallopts said, copper prices could reach $5.00 per pound.
Although copper miners are increasingly turning to Africa for high-quality metal, Chile and neighboring Peru are better positioned for the long term and need to quicken efforts to boost supply, he said.
(By Daina Beth Solomon; Editing by Lisa Shumaker)
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