The copper price is down 12 percent so far in 2015, at about $2.60 per pound, and a number of analysts and market watchers are calling for the market to stay in oversupply for the next two to three years at least.
However, after that, the situation is expected to reverse, with incentive prices for new production set as high as $7,073 per tonne. Indeed, with a lack of new supply on the horizon, some see a looming supply crunch, and firms such as Cormark Securities see the market returning to a period of structural deficits.
Meanwhile, a number of the world's biggest mining companies appear to be placing bets on copper. Global mine production of copper increased from 2013 to 2014, with mines producing 270,000 additional tonnes last year.
A rise in production volume, better grades and a number of new mines, ramp ups and expansions were enough to offset losses incurred from mine closures, lower grades and operational disruptions. Companies also combated lower yields, which accounted for two-thirds of total production losses.
Here's a look at the 10 top copper-producing companies of 2014, as outlined in this year's Thomson Reuters GFMS Copper Survey.
Production: 1.84 million tonnes
Codelco increased its copper production in 2014 to 1.84 million tonnes. In 2013, the company produced 1.79 million tonnes. The state-owned Chilean company is the world's biggest copper producer. This growth has led the company to expect oversupply in 2015, at which time it will begin to slow down its shipments, according to a Bloomberg article from last November.
"We cannot continue selling the same amount, as we have less," Rodrigo Toro, corporate sales vice president for Codelco, said in an interview. "Not only to China, not only to Asia. We are selling less to the world."
Still, the miner remains the largest in the world, and despite troubles with falling grades, there have been reports suggesting that Codelco's Ministro Hales mine in Chile will open soon.
2. Freeport-McMoRan (NYSE:FCX)
Production: 1.47 million tonnes
Freeport-McMoRan saw a dip in its copper production in 2014, producing 1.47 million tonnes compared to 1.535 million tonnes in 2013. The company is based in Phoenix, Arizona.
One of the company's assets is the Grasberg minerals district in Indonesia, which is one of the largest copper deposits on the globe. Grasberg exported less material last year due to a concentrate export ban in Indonesia, and has also had to temporarily halt production this year due to worker protests.
3. Glencore (LSE:GLEN)
Production: 1.296 million tonnes
A major diversified miner, Glencore produced 1.296 million tonnes of copper in 2014, an increase over 2013's total of 1.26 million tonnes. According to a press release the company issued in February of this year, the increase in copper production was largely due to the ramp up of Mutanda, one of its more recently developed sites.
4. BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT)
Production: 1.203 million tonnes
BHP Billiton saw a dip in production from 2013 to 2014, producing 1.205 million tonnes during the former and 1.203 million tonnes during the latter. The Australia-based producer had plans to improve production in 2015, but saw problems earlier this year at its Olympic Dam operation in Australia, forcing it to cut its production forecast by 60,000 to 70,000 tonnes.
5. Southern Copper (NYSE:SCCO)
Production: 665,000 tonnes
Southern Copper saw a gain in its copper production, putting out 635,000 tonnes in 2013 and 665,000 tonnes in 2014. The company, which is over 85-percent owned by Grupo Mexico, saw higher production at its Mexican operations — specifically the Buenavista mine — as well as improvements at its Peruvian operations.
The company believes it has the largest copper reserves in the industry. However, Southern Copper and Grupo Mexico got some bad press for environmental troubles at Buenavista mne this year — a toxic leak at the mine contaminated the Bacanuchi and Sonora rivers in Northern Mexico, turning waters orange.
6. Rio Tinto (LSE:RIO,NYSE:RIO,ASX:RIO)
Production: 636,000 tonnes
Rio Tinto produced 636,000 tonnes of copper in 2014, an increase over the 587,000 tonnes it produced in 2013. One of the largest diversified mining companies in the world behind BHP Billiton, Rio Tinto got some good news regarding its Oyu Tolgoi mine in Mongolia this May: after two years of setbacks due to disagreements over the project with the Mongolian government, the two parties came to an agreement to move it forward.
7. KGHM Polska Miedz (WSE:KGH)
Production: 506,000 tonnes
Poland's KGHM has operations in Europe, North America and South America, and says that it holds over 37.5 million tonnes of copper ore resources worldwide. In 2014, the company produced 506,000 tonnes of copper compared to 531,000 tonnes in 2013.
Despite this decrease, the company is certain its production will continue to grow, increasing its ranking as one of the world's top copper-producing companies. In January of this year, the company released an announcement highlighting its commitment to shifting its strategy.
8. Anglo American (LSE:AAL)
Production: 504,000 tonnes
Like many companies on this list, Anglo American produced less copper in 2013 than it did in 2014 — 516,000 tonnes and 504,000 tonnes, respectively.
Anglo has already said that its Q1 2015 production was lower compared to the same period in 2015 (from 202,000 tonnes vs. 171,800 tonnes). The decrease was largely due to the fact that the company took one of its Los Bronces processing plants offline to manage water reserve levels.
9. Antofagasta (LSE:ANTO)
Production: 455,000 tonnes
Chilean copper mining company Antofagasta produced 455,000 tonnes of copper in 2014, a decrease from 2013's total of 466,000 tonnes. However, according to a 2014 annual report released by the company, the loss was expected as the group focused on reducing costs and positioning itself for long-term growth.
"The completion of the concentrator expansion at Centinela in 2015 will increase production there, and in our two mining districts we were advancing our Encuentro Oxides, Pelambres Incremental Expansion, and Centinela Second Concentrator projects," Chairman Jean-Paul Lukasic said. With these advancements currently underway, the company expects to see considerable growth in copper production in coming years.
10. First Quantum Minerals (TSX:FM)
Production: 380,000 tonnes
Rounding out the list of 2014's 10 top producers is First Quantum Minerals. The company saw a bit of an increase in production from 2013 to 2014, producing 381,000 tonnes in 2013 and 380,000 last year.
That said, First Quantum experienced several setbacks in production throughout the year, including the suspension of operations at its Guelb Moghrein copper-gold mine in Mauritania due to strike action taken by some unionized employees in September. However, the company also acquired Lumina Copper (TSXV:LCC) and that company's Taca Taca project in Argentina._______________________________________________________________________________
(January 12, 2012)Top 10 Copper Producing Companies By Shihoko Goto - Exclusive to Copper Investing News Copper prices lurched forward on increased demand and worries about dwindling stockpiles during the first half of 2011. However, prices have since faltered amid concerns about the spillover effect of the Eurozone's debt crisis in addition to a slowdown in demand for copper from China. While prices are expected to be less tumultuous moving forward, demand is expected to continue outstripping supply, albeit slightly. The International Copper Study Group reported that global use of the red metal rose by 1 percent during the first nine months of 2011 compared to the same period the previous year, with Chinese demand rising 9 percent on year. The Lisbon-based group added that mine production continued to underperform relative to capacity, and was 1.8 percent lower in the first three quarters of 2011 compared to the same period a year ago. Still, copper prices have fallen by nearly 25 percent since the beginning of this year, peaking at just over $10,000 a ton and falling below $7,000. Earlier this month, Deutsche Bank reported that as global growth is less robust than projected six months ago, 2012 will be "a year of declining earnings" for mining companies, and cut earnings estimates by an average of 40 percent for major groups. Goldman Sachs lowered its 2012 copper price forecast to $9,200 a metric ton from $10,790, while Bank of America Merrill Lynch too cut back its projection to $8,375 a metric ton from $11,250. Still, many analysts expect the global economy to skirt a recession next year anticipating copper to average $4.06 a pound in 2012. Garrett Nelson, an analyst at BB&T Capital Markets, however, expects the price to average $3.25 a pound next year. Top Copper Mining Companies The world's top copper mining companies include, in order of production:
Codelco: The state-owned Chilean group is the world's single biggest copper producer, controlling about 20 percent of total global reserves. The company produced about 1.76 million metric tons of copper in 2010. Codelco has over $20.28 billion in assets, with 30 studies and projects in its current portfolio. Total capital expenditure is about $4.95 billion. It is currently in a lawsuit against Anglo American, as both sides accuse each other of violating the terms of a contract that gave Codelco the right to buy a 49 percent stake in Anglo American Sur, which includes the Los Bronces mine.Freeport-McMoRan (NYSE:FCX) The Phoenix, Arizona-based company is the world's largest publicly traded copper producer. It produced about 1.44 million metric tons of copper in 2010. Freeport-McMoRan is also the world's largest producer of molybdenum and a major producer of gold. A three-month-long strike at its Grasberg mine in Indonesia was resolved last month once the company agreed to increase wages by 24 percent in the first year, and by another 13 percent in the second year for the 8,000 miners. Union workers at the mine, which holds the world's largest recoverable reserves of copper, are expected to resume full work by January 20. At the height of the strikes at the mine, concerns about output disruption had increased speculation about prices rising and supplies falling. BHP Billiton (ASX:BHP) The Australian group produced about 1.14 million metric tons of copper in 2010. It has a five-year plan to invest $80 billion in capital expenditure on future opportunities, BHP has a 57.5 percent stake in Chile's Escondida mine, which is the highest producing copper mine in the world. Xstrata (LSE:XTA) The Swiss-British diversified mining group produced about 907,000 metric tons of copper in 2010. Last December, Xstrata completed the $111 million extension to its Kidd mine in Northern Ontario which it stated was done on time and on budget. In November, the company said that it had agreed upon a new three-year labor contract with over 550 workers at its Lomas Bayas mine in Chile. Rio Tinto (LSE:RIO) The London-based company produced about 701,000 metric tons of copper in 2010. It supplies about 18 percent of annual US refined copper requirements from its Bingham Canyon mine in Utah. Through a joint venture with Freeport-McMoRan, Rio Tinto has a 40 percent share of production above specific levels at Indonesia's Grasberg mine until 2021, and 40 percent of all production after 2021. Anglo American (LSE:AAL) The London group produced about 645,000 metric tons of copper in 2010, and has six copper operations in Chile. It also has controlling interests in Chile's Michiquillay project and a 50 percent stake in Alaska's Pebble project. Anglo American expects its Los Bronces project in Chile to produce over 900,000 tons a year by the end of this year. Grupo Mexico (OTC PINK:GMBXF) The diversified group based in Mexico City is involved with transportation and infrastructure as well as the mining industry. Its mining division represents the majority of the company's sales through the Southern Copper Corporation, which includes Minera Mexico and Southern Peru, as well as Asarco in the United States. Grupo Mexico produced about 598,000 metric tons of copper in 2010. Glencore International (LSE:GLEN) The Swiss company has a 34.4 percent stake in Xstrata, and it produced about 542,000 metric tons of copper in 2010. Glencore has mines in Canada, Australia, and South America, and the red metal produced in those regions are smeltered and refined in Western Europe, China, Southeast Asia, Japan, and the United States. In June, Glencore agreed to buy CST Mining's CST Resources unit for $475 million to gain control of the Mina Justa copper project in Peru. The deal fell through in November as CST Mining failed to meet the conditions required of the deal, but speculation is growing that the deal may be reviewed once again. Southern Copper Corp (NYSE:SCCO) The company which is 80 percent owned by Grupo Mexico is also listed independently on the New York Stock Exchange as well as the Lima Stock Exchange. It produced about 487,000 metric tons of copper in 2010. Its operations focus on southern Peru at its Cuajones and Toquepala mines, as well as its Cananea mine in Mexico. KGHM Polska Miedz (WAR:KGH) The Polish group produced about 426,000 metric tons of copper in 2010. Last December, the company agreed to buy Canada's Quadra FNX Mining for about $2.84 billion, or CDN 2.87 billion. The deal was seen as a move to reduce its own production costs while raising output, as the acquisition would increased annual production by over 100,000 tons from 2012.