Chile’s Codelco wants to invest the cash generated by the recent spike in copper prices towards its projects without raising further debt, according to Carlos Alvarado, vice president of sales at Codelco.
Conversely, Alvarado told local media outlets on Tuesday, the hikes could also drive up prices of goods and services providers who cater to the copper industry, which could increase the company’s mining costs.
According to data from the Chilean Copper Commission (Cochilco), the copper producer is planning to invest about $40bn in copper projects. Moreover, Codelco increased its production by 1.2pc to 1.72mn mt in 2020, from 1.70mn mt in 2019.
Rising copper prices
Copper prices have increased over the last month due to a recovery in global demand, a tight supply outlook, and a downward trend in the price of the US dollar, Cochilco said in a statement last week.
Copper prices reached $4.15/lb on Feb 23, up 1pc compared to the prior day, Cochilco data indicated. The prices have breached their highest point since 2011.
Chile’s copper production fell by 0.87pc to 5.73mn mt in 2020, from 5.78mn mt in 2019, due to the effects of the COVID-19 pandemic.
The South American country, the world’s largest copper producer, has increased its price guidance for copper to $3.30/lb. Chile’s copper production is also expected to increase by 3.6pc to 6mn mt this year, while copper output will reach 6.1mn mt in 2022.
($1=CLP 704.7)