Chilean state-owned miner, Codelco’s output is expected to drop in the next two years if development projects are not completed in a timely manner.
Last month, the company announced a halt in all construction activities in the short-term to curb the spread of COVID-19. Chile currently has 18,694 active cases of COVID-19 and has suffered 8,914 deaths since the outbreak in late-March.
With the company’s Chuquicamata smelter and its El Teniente mine shut since the past month, the copper output is set for a decline. The worst drought in 60 years also threatens operations at the latter. The company is currently focused on running skeletal operations with reduced staff.
According to media reports, delay in construction to upgrade assets could cause Codelco’s output to drop significantly by 2022. It could cause an estimated 2pc deficit in global copper production at 5-600,000mt less copper available for consumption. This is keeping in mind that Codelco is Chile’s largest producer and El Teniente accounts for one-third of its annual production of 1.6mn mt of copper.
The demand and price for copper is forecasted to continue rising as the world moves towards electric vehicles. Shortage in production from Chile, which is the largest producer of the red metal, could further this outlook.
Codelco had not responded to queries from Davis Index about the matter by the time of publication.