Chile Sees 2013 Copper Production Boost Contributing To Global Surplus
Even as copper producers are halting or delaying large new projects, Chile — the world's largest source of copper — is expecting record output to push global supply above demand for the first time since 2009, potentially depressing copper prices toward the end of the year.
Chile's copper commission, Cochilco, said this week that the country's copper output is expected to rise 3 percent this year, to 5.6 million metric tons (MT), and then to 5.75 million MT in 2014, Bloomberg reported. It left its average price estimate for the year unchanged at $3.57 per pound and estimates that world copper supply will exceed demand by 56,000 MT this year and 68,000 tons next year.
Increased output in Chile will largely be the result of BHP Billiton's (ASX:BHP,NYSE:BHP,LSE:BLT) plans to increase production at the world's largest copper mine, Escondida, by 20 percent this year, after the mine's output rose 70 percent in the second half of last year.
Other mines contributing to Chile's higher output are Anglo American's (LSE:AAL) Los Broncos mine, which saw a 31-percent increase in production to a total 54,100 MT in the fourth quarter last year, and Chile's state-owned Codelco, which this year expects to increase production to 1.7 million MT from “under” that amount in 2012, partly helped by the start up of the Ministro Hales copper mine. Still, Codelco's output looks likely to fall short of the years 2009 to 2011, during which it produced closer to 1.8 million MT.The expectation for increased production comes a couple of weeks after Chile's copper commission announced that the country will delay 11 out of 45 copper and gold mining projects, according to Minerandina, a weekly electronic mining publication. The delayed projects make up about $38.9 billion in deferred investments.
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