Copper slump to cause Chile $4bn in lost revenue: authorities
As copper prices keep going down a slippery slope triggered by signs of slowing in China and uncertainty about the future of stimulus in the US, Chile — the country’s No. 1 producer of the red metal — is warning of substantial loses.
According to market experts interviewed Friday by local paper La Tercera (in Spanish), copper is not only set for its worst quarter since 2011, but it is likely to continue at the current pace, ending the year as low as $6,590 a metric ton.
The sources said that price would translate into $4bn to $5bn in lost revenue from copper exports, compared to 2012, assuming levels of production and costs remain the same. In addition, it would imply the State would lose $2bn in royalties coming from both, private mining companies and Chile-owned Codelco.
In a phone interview, Alvaro Merino, National Mining Society (Sonami) research manager, told MINING.com that for each cent copper prices fall, the Chilean economy loses $120 million and the Treasury, close to $55 millions.
In 2012, mining accounted for 14% of Chile’s revenue, down from 18.41% the previous year, not considering Codelco’s contribution. The country's total exports reached $78.8 billion, with a 54% of it ($42.7bn) coming from copper exports.
Image by Horus Illustrations