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Global copper output to grow steadily in coming years – Fitch Solutions

18th March 2020

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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Global copper mine production will see steady growth over the next few years, as a number of new projects and expansions come on line, supported by rising copper prices and demand, research agency Fitch Solutions says.

It expects global copper mine production to increase by an average yearly rate of 3.1% over 2020 to 2029, with total output rising from 20.3-million tonnes to 26.8-million tonnes over the same period.

Chile is expected to modestly increase its copper production by 0.5% to 5.890-million tonnes this year.

It says growth will be led by the ramp-up at BHP’s Spence Growth Option over the second half of this year, while output is also expected to increase at Lundin Mining’s Candelaria mine.

Production from mines hampered by heavy rains in the beginning of 2019 is also likely to rebound this year.

Fitch forecasts Chinese copper mine production to increase at an average of 1.8% a year over 2019 to 2028, compared with an average growth rate of 6.9% over the past ten-year period.

This slowdown in production growth will be driven by the closure of low-grade copper mines in the country and delayed planned capacity expansions, Fitch says.

However, growth in domestic production is expected to still be positive as new projects come on line.

For Peru, Fitch is revising down slightly its forecast for copper production growth from 1% year-on-year in 2020 to 0% growth. This revision comes on the back of lower production guidance for MMG’s Las Bambas, as well as added pressures coming from expected lower copper output at the jointly-owned Antamina mine.

However, Minsur is expecting copper production at Mina Justa to begin in the fourth quarter, which should help to prevent a contraction in the country’s mined copper output.

Fitch is maintaining its modest growth forecast of 2% for the US, as the Pumpkin Hollow mine ramps up production. Despite pressure on profit margins as spot copper prices remain lower than expected, US miners are positioning themselves for long-term recovery in global copper demand, Fitch says.

Fitch has revised downwards the Democratic Republic of Congo’s 2020 copper mine production growth forecast from an average of 8% year-on-year to a contraction of 15% year-on-year as the Mutanda mine was placed on care and maintenance in November 2019, on the back of deteriorating project economics, owing to a decline in cobalt prices. The mine’s owner, Glencore, is reported to have said it would look to reopen the operation in two years’ time.

Fitch expects copper production in the country to recover in the longer term, driven by a rise in copper prices and continued foreign investments owing to the country’s high-grade reserves.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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