Arriagada said ongoing litigation to recover licenses for the firm's Twin Metals project in the United States could take a couple of years, but it was still an attractive asset. He noted that the mining deals market had become "more active", mainly motivated by the good prospects for the metal, though said any acquisition move by the company would have to be weighed against plans to develop assets it already owned. Arriagada also said the desalination plant at the company's Los Pelambres mine was expected to start supplying the operation in May and to return to full capacity in July. (Reporting by Fabian Cambero; Editing by Alexander Villegas and Jamie Freed)
8538;)) By Fabian Cambero
SANTIAGO, April 20 (Reuters) - Chilean mining firm
Antofagasta Plc sees a highly volatile copper market
with a slight shortage of supply this year, the company's CEO
told Reuters, adding that any unforeseen production shocks would
push up the metal's price.
Speaking at the CRU World Copper Conference in Santiago,
Antofagasta CEO Ivan Arriagada said fears of a global recession
remained due to the Ukraine war and financial uncertainties, but
he expected a "soft landing" as long as Chinese demand held up.
"Current supply and demand fundamentals support the price
levels we are seeing today," Arriagada said, adding that the
market would be better balanced in 2024 and 2025 because new
sources of production would come online.
The price of the metal used in power and construction
has drifted lower in recent months to around $8,960 a tonne . It remains far above pre-COVID levels of about $6,000 a
tonne but below last year's record high of $10,845.
"We project that 2023 will have a slight deficit with very
limited inventories," Arriagada said, predicting a volatile
price that will be "very sensitive" to going up with "any supply
shock", citing worker strikes or other operational challenges.
He also predicted that a deficit would grow starting in
2026, largely due to growing copper demand for the energy
transition.
Arriagada said the firm's $3.7 billion improvement plan for
the Centinela mining area was being finalized and would then
need board approval, though added it relied on clarity about the
mining royalty bill currently being debated in Chile's Congress.
"It represents a large investment and also enables a
production period of more than 20 years," Arriagada said.
"Therefore, knowing the fiscal conditions that we're making the
investment in is important."
Antofagasta and other companies have called for greater
dialogue on the controversial mining royalty bill, saying it
would hurt the country's competitiveness against other mining
nations like Australia or Peru.
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