Vancouver — Asarco, the U.S. subsidiary of
The announcement, prompted by high production costs and low copper prices, would cut another 50,000 tonnes of metal from the market. Last year, Asarco, slashed output at Mission by 61% in response to oversupply and lower demand, causing overall production of refined copper to fall by 151,000 tonnes.
The prospects of closing Mission would also affect the company’s Hayden copper smelter in Arizona, which depends on feed from the mine.
Despite 18 months of production cuts from the top five global producers, which includes Codelco,
With the majors accounting for only 40% of overall copper output, smaller players continue to produce at a record setting pace. In early September, 10 major Chinese copper producers agreed to cut output by 120,000 tonnes per year.
However, the latest national production figures indicate that the metal is still being churned out at a rapid pace. In the first nine months of the year, refined output was up 13.5% over 2001, coming in at 1.2 million tonnes. China’s second-largest producer, Jiangxi Copper, says it will produce 220,000 tonnes of copper, little changed from last year. In September, the company stated it would reduce its target to 208,000 tonnes.
The world’s largest copper producer, state-owned Corporacin Nacional del Cobre de Chile (Codelco) says its intends to prolong production cutbacks through 2003 at its largest mine, Chuquicamata.
So far, Codelco has cut 106,300 tonnes of copper output from four of its five operations, with the biggest cut, 50,000 tonnes, occurring at Chuquicamata.
Copper prices have averaged US70 per lb. so far this year and are showing little sign of recovery in the near term. Chile, which holds 40% of the world’s copper reserves, predicts an average 2003 price of US77 per lb.
For the year, Chuquicamata is expected to churn out 600,000 tonnes of copper concentrate. The 92-year-old mine holds only enough reserves to last another decade, though nearby deposits could conceivably extend the district’s life to 40 years. Production of copper cathodes at Codelco North, which includes the Chuquicamata and Radomiro Tomic mines, is expected to increase to 700,000 tonnes per year by 2006, a considerable jump from the current 450,000 tonnes.
For the fist six months of the year, Codelco posted a 4.6% drop in production to 716,000 tonnes. The major produced 1.7 million tonnes of copper last year from its five wholly owned mines and a 49% stake in El Abra, which is controlled by Phelps Dodge.
Meanwhile,
The major subsequently extended the cuts in December 2002, removing an additional 80,000 tonnes from Escondida through to the end of this calendar year.
In total, the combined cuts at Escondida amount to 250,000 tonnes over the course of 2002. Overall, production there is expected to result in slightly less copper in calendar 2002 and 2001, despite the start of a fourth phase of work in September.
BHP owns 57.5% of Escondida, the world’s largest copper mine, which last year produced 794,131 tonnes of the red metal. The remainder is held by
Other big copper producers slashed production at about the same time as BHP in a further attempt to battle a surplus of the metal.
Phelps Dodge is producing at the rate of about 908,000 tonnes copper per year — just two-thirds of its annual capacity of 1.5 million tonnes.
Meanwhile, Grupo Mexico-controlled
The star performer for the company was the Cuajone mine, where production was up 3,087 tonnes over the third quarter of 2001. The improvement reflects higher grades and better recoveries.
Grupo Mexico has a 54% stake in the company, with Phelps Dodge and Cerro Trading each holding about 14%.
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