Mining companies in Chile could face supply chain and distribution disruption if they reduce operations following the spread of the COVID-19 virus.
Miners working in these operations are also projected to lose $75mn per day due to reduced mine operations as companies try to safeguard their workers and business from COVID-19’s effects.
Chile produces 16,000mt of copper per day at around $2.12/lb, Cristian Pinto Gutiérrez, an academic at the Northern Catholic University in Antofagasta, Chile told Davis Index.
Copper prices are also likely to decrease due to possible disruption in the distribution and supply chain, and a possible global recession that implies lower prices per ton, Gutiérrez said, adding, Chile’s copper prices dropped by 24pc during 2020 after industrial production in China droppped by 13.5pc between January and February 2020 due to COVID-19.
Chilean copper prices have declined over the last two weeks because of uncertainty induced by the global spread of the virus, and there’s no clarity on their rebound.
Copper prices declined by 5.8pc to $2.36/lb on March 16, according to the Chilean Copper Commission (Cochilco).
Chile’s copper production increase by 0.4pc to 459,100mt in January this year, driven by higher production from some of the largest miners. Its production was expected to reach 5.87mn tonnes this year, while production for 2021 is expected to rise to 5.91mn tonnes, Cochilco has indicated.