Anglo American to increase copper production in Chile
Anglo American (LON:AAL) has increased its copper production guidance from its Chilean operations this year to 660,000 tonnes, up from a range of 630,000 to 660,000 tonnes previously anticipated, based on planned expansions at its Los Bronces and Collahuasi mines.
The world's number four diversified miner has also set new targets for the next three years. It now expects to generate between 630,000 and 660,000 tonnes of copper in 2019, up from 600,000 to 660,000 tonnes previously.
Anglo American is pushing ahead with expansions at its South American mines as it expects copper supply to become further constrained in the years and decades ahead.
In 2020, the company anticipates copper production to be in the range of 620,000 to 680,000 tonnes from 600,000 to 660,000 tonnes previously. And for 2021, Anglo American has published its first guidance for the period, pegging it in the range of 590,000 to 650,000 tonnes.
The new production figures, unveiled during an investor visit to Anglo’s copper operations in South America, also came paired with lower cost guidance of 140 c/lb for 2018, compared with 145 c/lb previously, and 135c/lb to 140c/lb for 2019.
In July, the company kicked off construction at its $5-billion Quellaveco mine, in Peru, and said it expected to add the first production from the operation in 2022.
The project, 60% owned by Anglo American and 40% by Mitsubishi, is set to produce 300,000 tonnes of copper a year, at a cash cost of $1.05 per pound oon average over the mine's first ten years.
Copper deposits are among the hottest assets in mining right now, with the world’s top producers becoming increasingly bullish on the metal. There are expectations that bigger power grids around the world and an electric-vehicle boom will boost demand, while supplies are constrained.
Chief executive Mark Cutifani confirmed that Anglo American expected the copper supply to become further constrained in the years and decades ahead.
“[Copper] is a key ingredient in the fast-growing renewable energy and electric vehicle markets, in addition to the infrastructure, housing and consumer electronics markets that continue to be fuelled by the world’s fast-expanding middle class population,” Cutifani said, adding that the company is ensuring it will be ready to meet that significant additional demand.