Copper production in Chile, the world’s largest producer of the red metal, will grow at a slower rate this decade than previously hoped, a government report seen by Reuters showed, with peak output later and lower than estimated a year ago.
Likely output of the red metal will peak at some 7.14 million tonnes in 2030, two years later than anticipated as delays hit mining projects in the Andean nation, according to an unpublished report from regulator Cochilco obtained by Reuters.
That is well below the 7.62 million-tonne 2028 peak the regulator had estimated in its decade outlook a year ago.
“Lots of important projects in the next decade haven’t advanced in engineering or environmental baselines during the pandemic,” the report said, adding that its outlook was “quite lower than projections made in previous years.”
Production snarls in Chile could prop up the global price of the metal, which has soared since 2020 past $9,000 per tonne. Also, protests in neighboring Peru have curbed production in major mines at the world’s No. 2 copper producing country.
Despite the expected slower growth in Chile, the report forecasts production to grow 17% to 6.58 million tonnes by 2033. Expected output will be 5.345 million tonnes in 2022, 5.467 million tonnes this year and 5.891 million tonnes in 2024.
The report states that its projections depend on all planned mining projects in the current portfolio coming online, adding that projects to maintain and expand current mines would not be enough on their own to meet projections.
“It’s necessary for all the new initiatives on the national investment portfolio to materialize, which would contribute 17% of production towards 2033,” the report added.
In a response to questions from Reuters, Cochilco research head Víctor Garay said the peak couldn’t come earlier as new projects needed studies and analysis, which “take a long time”.
Chile’s copper sector, the country’s top exporter, has demanded more “legal certainty” for investment after the government recently denied permits for the Dominga iron and copper project and amid uncertainty over a new constitution.
On Wednesday the chief executive of miner Freeport-McMoRan Inc said Chile expansion projects were on hold until the country’s political situation was clearer.
The report showed a production fall last year versus 2021 but said that this “should close the cycle of production losses associated with the (covid-19) pandemic.”
There will also be a likely production drop after the 2030 peak as some operations close or produce less “without expected replacement projects that would allow continuity.”
[Click here for an interactive chart of copper prices]
(By Fabian Cambero; Editing by Alexander Villegas, Adam Jourdan and David Gregorio)