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Chilean miner Codelco says copper price spike will bolster war chest, raise costs

Kitco News

SANTIAGO (Reuters) - Chile’s state-owned Codelco, the world’s largest copper producer, views recent spike in the price of the red metal as a “good opportunity” to generate cash for investments and hold down debt, but warned it could also drive up the miner’s costs, a senior executive told Reuters on Monday.

The price of copper shot above $9,000 a tonne for the first time on Monday since 2011, as a nascent global economic recovery has prompted demand to boom for the commodity, critical to global construction and manufacturing sectors.

Codelco vice president of sales Carlos Alvarado said the growing expectations would likely also spur goods and service providers to hike prices, leading to higher overall costs for the state-run miner.

The executive said it was still “too early” to know if the spike in the global copper price represented a new “super-cycle,” similar to that seen in the early 2000s following a tectonic demand boost from industrialization and urbanization in emerging nations.

Reporting by Fabian Cambero, writing by Dave Sherwood; Editing by David Gregorio

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