Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Copper production at Quebrada Blanca 2 (QB2), one of the biggest mining projects in Chile, could begin as late as Q2 2022, according to Sumitomo Metals and Mining’s FY 2020 outlook.


SMM noted that around 29pc of project construction had been completed before QB2 was put under care and maintenance by the Chilean government in March. The impact of this delay and last year’s civil unrest in the country, which caused disruptions at the mine, has set back QB2’s launch date from Q4 2021 to the second quarter of 2022.


The Japanese miner, which holds a 25pc stake in this project along with its parent company Sumitomo Corp, which holds 5pc, expects an average output of 240,000mt per year once production begins.


The company is more upbeat about nickel production from its Pomalaa project in South East Sulawesi, Indonesia. The miner indicated that mining operations are slated to begin in H2 FY2020 and that it expects the mine to produce around 40,000mt of nickel per year.


SMM, which shared its outlook for FY2020 (fiscal ending March 31, 2021) on Tuesday, noted that COVID-19 did limited damage to its FY2019 production at its Sierra Gorda copper mine, which produced 108,000mt during the year. 


Likewise, the pandemic’s effects aren’t expected to hurt Sierra Gorda’s FY2020 production, which is estimated at 143,000mt. SMM’s guidance for Chile’s Candelaria mine, which produced 141,000mt of copper in FY2019, is also estimated higher at 168,000mt in FY 2020.


The company’s Morenci mine in the US is, however, estimated to yield 420,000mt of copper in FY2020, which is below its FY2019 actual production of 461,000mt (guidance 60,000mt). The company’s Cerro Verde mine in Peru, which has been under care and maintenance since March 16, is estimated to produce 380,000mt this year compared to 455,000mt last fiscal.

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