Supply surplus to hit copper prices – Antofagasta CEO

Chilean copper miner Antofagasta Plc. (LON:ANTO) says copper prices will fall in 2014 as new projects enter the market, fuelling supply.

In an interview with Reuters, CEO Diego Hernandez said the industry had struggled lately due to huge increases in operating costs but that this rise was beginning to wane.

In fact, according to Hernandez, project costs have fallen 10 to 15% over the past two year, although he pointed out that even this drop wouldn't make up for the drastic cost increases from years before.

Copper prices have risen drastically over the past decade, hitting highs of nearly $10,000 per metric tonne in 2011.

This figure has been dropping since, hitting July 2010 levels a few months ago.

And it will sink further as new mines go into production and the market enters a surplus, Hernandez said.

According to estimates from the International Copper Study Group, mine output will increase 6.4% this year.

"If we expect a surplus by the end of this year then next year we expect a lower price," Hernandez told Reuters. "But I don't think the market will change too much from where it is now."

Meanwhile, Chile's mining minister announced on Tuesday that his country will produce about 5.7 million tonnes of copper this year – a 5% increase on 2012 and a historic high, Reuters reports.