Peru Is Mulling Over Tax on Excess Profits from Mining, Freeport-Mcmoran Projects a Surge in Copper Demand

SHANGHAI, Apr 6 (SMM) - 

Peru is mulling over tax on excess profits from mining

According to data in 2019, Peru was the second largest copper producer in the world, accounting for more than 10% of the global output, second only to Chile. Therefore, any change in Peru always affects the global copper market. Although Russia’s share of copper global production is less than 5%, the Russian-Ukrainian war has led to soaring prices of energy and agricultural products, causing riots in Peru, and indirectly pushing up international copper prices. As of April 5, LME copper jumped above $10,500/mt, close to the all-time high hit in March.
 Oscar Graham, Peru’s Minister of Economy and Finance, said Peru needs to better distribute mining wealth to ordinary people in order to quell protests against mining, “The government is considering tax adjustments, but how the tax rate will be adjusted is still being assessed."

Tight copper market is not just a price issue

Richard Adkerson, president and CEO of Freeport-McMoRan Inc., the world's largest copper and gold miner, said on Wednesday that the supply tightness in the copper market is "not just a price issue."

Adkerson added that while Freeport was profitable, deteriorating deposit quality and a more demanding operating environment prevented the company from significantly accelerating projects. “Even if copper prices doubled overnight, it would still be years before we could see a substantial increase in production,”Adkerson said. Copper demand will surge in the transition to clean energy, and the market demand for copper will increase at a pace that is far faster than companies like us can produce it. Unless the economy falls into a severe stagnation, copper will become very scarce as demand from the electric vehicle and renewable energy industries picks up.