World's copper production to reach 25 million tonnes in 2026 - report
(Kitco News) - According to the Australian Government’s Department of Industry, Science, Energy and Resources (DISER), the world’s copper mine production was stable year-on-year in 2020 at approximately 20 million tonnes, as mine expansions in Indonesia and resilient production in Chile balanced shutdowns in Peru and the Democratic Republic of the Congo (DRC).
DISER said that the world’s mine copper production is projected to grow at an average 3% a year over the outlook period, to reach 25 million tonnes in 2026. Most of the growth is weighted towards the start of the outlook period, however, a fall in market conditions or stagnant prices could see investment delayed.
According to the report, Chile and Peru are expected to remain the largest copper producers over the outlook period, respectively accounting for around 25% and 12% of world production in 2026. However, significant investment in capacity in Indonesia is expected to be the biggest driver of world production growth over the outlook period. Elsewhere Anglo American’s Quellaveco mine in Peru (estimated capacity of 300,000 tonnes per year), is expected to come online in 2022, added DISER.
DISER noted that a number of structural issues weigh against significant increases in copper production over the medium-term and beyond. These pose a risk of deeper market deficits. Challenges facing mine operators include declining ore grades, aging facilities and increased production costs (particularly in a high price environment where input costs may increase).
Producers will look to offset these losses with increasing processing rates and productivity improvements. Environmental and social responsibility issues are other factors likely to impact on copper production, as has been seen in the delay in Southern Copper's Tia Maria project to Peru. In addition, most new projects in the development pipeline lack the scale of existing mega projects, like BHP’s Escondida mine in Chile, which produced 1.2 million tonnes in 2020, the report concluded.