SUZHOU, Dec 4 (SMM)— Due to the increasing popularity of electric vehicles, potential global environmental stimulus programs, and China's efforts to achieve carbon neutrality by 2060, key policy directions still herald the broad prospects of copper in the medium term.
Yesterday, at the 2020 Nonferrous Metals Industry Chain Annual Conference in Suzhou held by Shanghai Nonferrous Metals (SMM), Laure Baratgin, Vice President of Sales and Marketing of Rio Tinto’s Copper and Diamond Division, discussed the company’s "mine to market" strategy for copper products, and also shared business experience in the COVID-19 pandemic.
The revenue from the copper business accounts for a relatively small share of Rio Tinto's total operating revenue ($6 billion per year), accounting for approximately 14%. Rio Tinto's Corito Copper Mine and supporting smelters near Salt Lake City, Utah have been producing more than 200,000 mt of copper cathodes per year. At present, the lifespan of the mine has been extended to 2032. The miner's Oyu Tolgoi copper mine project in Mongolia will also continue to expand and receive a large amount of investment. It is expected to reach the annual production capacity of more than 2 million mt of copper concentrate in the next 5-7 years.
Rio Tinto also holds a 30% stake in the Escondida copper mine project in Chile. In addition to these three mine projects that have been put into operation, the miner is continuing to promote two other important copper mine projects- the Wennu copper-gold project located in Western Australia, and the Resolution copper project located in Arizona, United States.
With regards to the copper market, Baratgin noted that copper prices fell to a low point in March 2020, reaching 209 cents per pound. Subsequently, the world gradually recovered in Q3 after the first wave of COVID-19, and strong economic activity data helped maintain the cautious optimism of copper prices till 2021. "This rebound was affected by changes in supply and demand in the metal-intensive market, mainly due to rising demand for consumer goods and weakening demand for services, vacations, and transportation caused by the pandemic."
At the same time, China's recovery is mainly supported by real estate, infrastructure and exports. Copper prices hit a 28-month high in October, reaching 315 cents per pound, which is 50% higher than the low point at the beginning of the year.
In addition to the ongoing investment, Rio Tinto is also actively investing to develop and support China's copper smelting industry.Baratgin said that Rio Tinto has established an key joint venture with China's Minmetals, to promote mineral exploration in China. "We are committed to achieving decarbonization, and is formulating a strategy to reduce carbon emissions by 30% by 2030 and achieve zero carbon emissions by 2050."