Chile state mining company Codelco, the world’s largest copper producer, will seek to quadruple sales in Southeast Asia by 2023 and push further into the Indian market in an attempt to reduce a strong reliance on sales to China, the company told Reuters.
The firm will open a new office in Singapore in August to help lead the push around the region to deal with clients in Vietnam, Malaysia and Thailand, among others, and to lead the drive into India, it said.
The push by the world’s top producer of the red metal comes with global copper prices elevated amid recovering demand worldwide and expectations that long-term shifts towards electric vehicles will drive future need for the metal.
In comments in response to questions from Reuters, Codelco said that these markets should have the highest growth in copper consumption over the next 20 years.
“Southeast Asia and India today represent about 8% of refined copper consumption globally, and this percentage is expected to exceed 20% in 2040,” Carlos Alvarado, a vice president for Codelco said in a statement.
China is the main buyer of Chilean copper and the top client for Codelco, which has a key office in Shanghai.
“An important factor in strengthening our relationship with Southeast Asia and India is the anticipation… that, in the short term, China will reduce its dependence on importing refined copper, because it will have a greater smelting capacity to produce it,” says Alvarado.
“In addition, we will mitigate the risks of lower growth in the Asian giant.”
The state miner currently sells in India concentrate of copper, blister and molybdenum, but it said to enter the copper cathode market talks were expected towards bilateral agreements to eliminate imports tariffs of up to 5%.
Alvarado explained Codelco’s commercial strategy was to strengthen leadership in copper supply to the United States, establish long-term alliances with end customers in Europe and Asia, and reduce dependence on China, increasing participation in the emerging markets of the Southeast Asia and India.
(By Fabian Cambero, Tom Daly and Adam Jourdan; Editing by Sandra Maler)