World's top copper miner sees strong metal prices continuing for some time
Codelco's 2010 copper output fell, but looking for steady production in 2011, while profits have been rising on strong copper prices and look like remaining positive in the years ahead
Posted: Friday , 25 Mar 2011
SANTIAGO (Reuters) -
Global No. 1 copper producer Chile's Codelco said Friday its 2010 output dipped but should be steady this year, and expects strong Chinese demand, Japan's recovery after a natural disaster, as well as new uses to stoke demand.
Codelco said profits surged 47 percent to $5.8 billion in 2010, with a rise in copper prices to record highs more than compensating for a 0.8 percent fall in production from 2009 to 1.688 million tonnes. [ID:nN08136598]
CEO Diego Hernandez told a news conference he sees output at around 1.7 million tonnes this year, saying Codelco's smelter and refinery business may continue to perform badly in coming years and that problems with some operations could hit output at its Gaby mine.
The state-run miner expects prices to remain high for some time as it warned that geopolitical risks, aging mines, lower ore grade and the complexity of new projects posed a challenge for world supply.
And reconstruction after Japan's devastating earthquake and tsunami should lead to increased demand, Hernandez said, saying high prices were also stoking scrap copper.
"Japan is ... getting back on its feet fast and we think that overall it shouldn't have a negative impact and could have a positive impact due to reconstruction," Hernandez said.
Hernandez also sees copper demand benefiting from alternative uses in the future.
He sees potential future demand in the hundreds of thousands of tonnes for applications for copper in hospitals due to its antibacterial qualities. Electric cars and wind farm towers are seen boosting demand in the nearer term. [ID:nN10122596]
Hernandez said he did not expect Codelco to suffer amid an energy squeeze, saying he did not anticipate any energy problems, adding that high global fuel prices should not have an exaggerated impact on business in 2011. (Reporting by Alonso Soto and Fabian Cambero; Editing by Simon Gardner)
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