BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Metals

Chile's Antofagasta sticks to plan despite looming copper deficit

Agriculture | Natural Gas | Oil | Metals | Petrochemicals

US-China Trade Tension

Platts Market Data – Oil

Agriculture | Electric Power | Natural Gas (North American) | Oil | Metals | Petrochemicals

North American Digital Commodities Summit, 2nd Annual

Metals | Steel

US can't lose benefit of steel tariffs on Canada, Mexico imports: mill groups

Chile's Antofagasta sticks to plan despite looming copper deficit

Santiago β€” The global copper market is moving towards deficit faster than expected,but Chilean copper producer Antofagasta plc is sticking to its cautiousinvestment plans, CEO Ivan Arriagada said ahead of the World Copper Conferencein Santiago.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

With China, the world's largest consumer of copper, demanding more metalthan expected and a lack of new major mine projects entering production,analysts had been predicting demand to outpace production by the end of thedecade.

"While we were expecting a shortfall by 2020, that has probably movedforward by a couple of years," Arriagada told Platts in an interview.

Demand has been ramped up around the world by increased investment inrenewable energy and electrification while underinvestment by existingproducers could mean an even tighter market than analysts predicted.

"Because of the downturn, we have not seen all of the investment requiredto sustain production and that will have an impact on copper production in thenext couple of years," Arriagada said.

All of this should prove supporting for prices which last year slumped totheir lowest level since the global financial crisis.

But Arriagada remains cautious.

"More than where it might go, we do not expect to return to the prices wesaw last year and, if you push me further, I would say that I do not expectprices to be below $2.50/lb," he said, noting that significant risks remain.

While Chinese consumption has risen, he said rising internal debtsremained a risk to the Chinese economy that could impact future copper demand.

But the biggest risk to global copper demand was that posed byprotectionism and the risk of a global trade war, following the election of USPresident Donald Trump last November.

With the improvement in copper prices, Antofagasta is now preparing todevelop major projects at its Chilean operations that it continued to advancethrough the engineering stages during the downturn.

Following the completion of its new Antucoya mine last year and theEncuentros oxides deposit which enters production later this year, the companyis preparing to approve a $1.1 billion investment at its Los Pelambres minelater this year.

The capacity expansion will compensate for harder ore at the mine,allowing it to produce 400,000 mt/year of copper in concentrate from 2020, upfrom 355,400 mt in 2016.

The other project in the pipeline is a second concentrator at itsCentinela complex, a $2.7 billion investment which would add 140,000 mt/yearof concentrate production.

But Arriagada said the traditionally conservative company felt nocompulsion to accelerate its investment program in the expectation of atighter copper market.

"We do not want to embark on two big projects at the time because ofbalance sheet commitment and execution capability so we want to do themsequentially," he said.

Work on the new concentrator would not therefore begin until thePelambres expansion is completed, he added.

--Tom Azzopardi, newsdesk@spglobal.com

--Edited by Jeremy Lovell, jeremy.lovell@spglobal.com