Chile's Codelco copper production will exceed expectations despite the strike [LME WEEK]

Juan Benavides, chairman of Chile's national copper company (Codelco), the world's largest copper producer, said that despite the strike on its Andina copper project, the company's copper production this year would be 2 per cent higher than previously estimated.

Copper prices have hit record highs this year, causing mining companies' revenues to soar and Chilean unions are fighting for more lucrative wage contracts, straining negotiations.

(Cochilco), the Chilean Copper Commission, reported that copper production in Codelco, Chile, fell 6.7 per cent in August from a year earlier to 144500 tonnes, affected by a strike at the Andina project near Santiago.

"of course, the production of the Andina project will decline, but the overall copper production of the Andina and Codelco projects will be higher than this year's target of 1.6 million tons," Benavides said in an interview with LME week, a metals industry conference in London on Monday.

"We have strong cash flow to finance our operations and structured projects. We don't need to borrow in the short term, "he said.

He added that the cash would not be used to repay the debt.

Copper prices fell last year as the coronavirus pandemic hit manufacturing activity, but the easing of blockades at the end of last year, particularly in China, the largest consumer, contributed to a surge in copper prices.

Chile's Codelco is embarking on a 10-year, $40 billion plan to upgrade its large but aging mines. In recent years, these mines have been hit hard by the sharp decline in ore grade.

Benavides believes that the Chilean Glacier Protection Act, which will significantly increase taxes on copper miners, will not affect Andina project arrangements.

"We decided to move the Andina mine away from the glacier," Benavides said. "We believe it is possible to protect the glacier while developing the Andina project."

Chile outlined plans to require miners to reduce water use during prolonged droughts.

Chile wants mining companies to reduce water use from glaciers, rivers and lakes to 10 per cent by 2030, to 5 per cent by 2050, and to be carbon neutral by 2040. At present, water resources from these areas account for 18% of the total water consumption.