Copper prices have been rallying for the past months on expectations that demand will outplace supply in 2011. While demand will continue to be supported by China, a decline in ore grades in the world's operational mines and a scarcity on new mines in the pipeline will further exacerbate the supply-demand shortfall. BMO Capital Markets has anticipated a deficit of around 380,000 tonnes over the next 12 months; while Standard Bank predicts a gap of 385,000 tonnes as mining companies struggle to keep pace with growing demand. Goldman Sachs believes all the facts combined will result in a price tag of $11,000 before the year end, while Bank of America Merrill Lynch has set the bar at $11,250 per tonne.Company News Pan Pacific Copper Co. plans to start operating its Quechua copper mine in Peru at the end of 2014, with annual production targeted at 75,000 tonnes per year. Pan Pacific will finish its environmental study on the project this February. The company has invested $70 million in studies of the deposit to date, and will conclude a feasibility study in the first quarter of 2012. Anglo American Plc. and Xstrata PLC are seeking approval to begin copper shipments from a new site for its Collahuasi venture; the worlds third-largest copper mine. Over two weeks ago, an accident that caused three deaths shut its port in northern Chile. The company has since invoked force majeure. Patache may remain closed for “a couple of months,” Miguel Angel Duran, Anglo's head of Chilean operations, told reporters in Santiago on Dec. 23. Collahuasi processes ore into concentrate, an intermediary product that's transported by pipeline to Patache. Collahuasi produced 535,000 metric tons last year, or 3.5 percent of global output, according to Standard Bank Plc. Its production is only surpassed by Escondida and Freeport-McMoRan Copper & Gold Inc.'s Grasberg mine in Indonesia.
Codelco announced Tuesday that 2010 was a record year for its Radomiro Tomic mine. The mine produced 309,400 tonnes of copper cathodes in 2010. Output was enhanced by a new bioleaching facility that opened in 2010. Codelco spent roughly US$5.5 million for the plant that can process roughly 20Mt of ore with an average copper grade of 0.55 percent.Economic Optimism Spurs Copper from Copper Investing News