In New York trade on Monday copper for delivery in December consolidated its recovery from six year lows hit last week, trading at $2.34 in late afternoon.
That’s up some 6% from an intra-day trough of $2.20 per pound or around $4,850 a tonne set last week which was the lowest since July 2009 and down 30% over the past year.
Last week Freeport-McMoRan (NYSE:FCX) became on the first major copper miners to announce its slashing production to cope with the depressed copper price.
Freeport plans to cut capital spending for 2016 by almost a third, reduce copper sales by about 150 million pounds per year in 2016 and 2017 and lower unit site production next year by 20%.
But its programme of cuts which sent its share price soaring in New York after the news ran into trouble on Monday. A union that represents workers at Freeport’s 51%-owned El Abra mine in Chile said it was considering action after 700 workers, half the total number of employees, were let go over the weekend.
Reuters quotes Gustavo Tapia, head of the Chile Mining Federation union, dismissed the fall in the copper price as a “cyclical issue” and said multinational companies had sufficient profits to ride it out.
The remainder of El Abra which last year produced 166,000 tonnes of refined copper is owned by Chile’s state-owned Codelco which is itself on an aggressive cost cutting drive.
“Codelco has just resolved a three-week dispute with contractor workers across its operations, which cost some 17,000 tonnes in lost output,” according to the news wire.
Codelco announced half year results on Friday that showed profits dropping by a third to $875 million despite an increase in production of 5.5% compared to last year.
Codelco is hoping to cut costs by around $1 billion this year and is 60% on its way to achieve that target.
Chile produces nearly a third of the world’s copper.
Image by Corrie Barklimore</em>