Global copper output up 2% in Q1 2021, but fears of production shortages remain - report
(Kitco News) - According to the data by the Department of Industry, Science, Energy and Resources of the Government of Australia (DISER), in Q1 2021, global mine copper production increased by 2%, constrained by interrupted production in Chile and Peru.
DISER said that production in Chile and Peru, the two biggest copper producing countries, continues to be impacted by COVID-19 operating restrictions.
Chile’s Q1 2021 production was down by 2% year-on-year, despite higher output from state-owed Codelco facilities. Current operating arrangements, and risks of strikes are adding to operating uncertainty, in addition to discussion of a new mining tax policy, the authors noted in a report.
In Peru, Q1 2021 production was up 3% year-on-year, but remains below pre-COVID-19 pandemic levels. Mining royalty arrangements are also being discussed in Peru, with a presidential candidate running with a policy to increase royalty rates.
In its report, DISER noted that recent outages, as well as a number of potential further constraining factors (tax arrangements, political instability and supply-chain problems) are leading to fears of production shortages over the medium term.
However, DISER pointed out that copper production is expected to overcome these issues, with time and a strong development incentive in current prices. Mine production is forecast to reach 25 million tonnes in 2023, up an average 6% a year on 22 million tonnes in 2021.
Chile’s mine output is expected to steadily grow over the outlook period, facilitated by Codelco’s US$40 billion mine redevelopment plans. In January, the first stage of the El Teniente redevelopment plan began, which is expected to lift capacity to 500,000 tonnes by 2023.