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Chile Codelco CEO: 2012 Copper Prices To Remain High
Dec 1,2011 09:48CST
industry news
Source:SMM
Copper prices will likely remain high in 2012, as demand for the metal is expected to continue to outpace supply, the chief executive of Chilean state mining giant Codelco said Wednesday.

Nov 30, 2011 SANTIAGO (Dow Jones)--Copper prices will likely remain high in 2012, as demand for the metal is expected to continue to outpace supply, the chief executive of Chilean state mining giant Codelco said Wednesday.
   
Codelco estimates Chinese demand for the red metal will remain strong as it continues to expand its infrastructure.

"Even with China slowing down to grow only 8%, demand will remain very strong," Codelco's CEO Diego Hernandez said, noting that the Asian nation currently consumes 38% of the world's annual copper supply.

While he declined to provide a specific price estimate, he noted that prices should hover above the $3-a-pound mark next year.

In prepared remarks to the Amcham Chile-U.S. chamber of commerce, Hernandez said copper prices wouldn't fall to levels seen in the 1990s.

"We are very far away from the historical prices we were used to in the industry at around $0.80 to $1.50 a pound," he said, noting that today's global copper industry "wouldn't be able to handle these prices."

Copper supply and demand will remain tight in coming years as most of the world's largest mines are getting older and requiring bigger investments to produce the same amount of copper.

Ore grades, or the amount of copper contained in the mined material, are falling and industry costs are increasing, he said.

According to the executive, new projects that were scheduled to come on line in recent years have seen delays, production ramp-ups have been slower than expected and some mines have been plagued by labor problems.

"Escondida saw an illegal strike, Esperanza's delayed in ramping up to capacity and Grasberg is on strike," he said.

Escondida and Esperanza are located in Chile and controlled by BHP Billiton Ltd. (BHP) and Antofagasta PLC (ANTO.LN), respectively, while Grasberg in Indonesia is controlled by Freeport-McMoRan Copper and Gold Inc. (FCX).

Regarding Codelco's ventures outside Chile, Hernandez said the company aimed to set up a subsidiary to participate in exploration joint ventures in the region.

Codelco recently signed an exploration agreement with Ecuador's Empresa Nacional de Mineria, or Enami EP, and has prospects in Brazil. It's also mulling exploring in Colombia, Hernandez said.

 

Chile Codelco CEO;copper prices

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