Exclusive – Copper giant Codelco sees ‘very firm’ copper price going forward despite recent drop

Chilean state-owned mining company Codelco, the world’s largest producer of red metal, expects a firm copper price going forward, despite the recent sharp decline, chairman of the board Mximo Pacheco said in a Reuters Santiago interview.

The comments come as copper prices registered their biggest weekly decline in a year, as investors feared that central bank efforts to stem inflation could stifle global economic growth and reduce demand for the metals.

“We may be in temporary short-term turbulence, but what is important here are the fundamentals, the balance between supply and demand looks very favorable for those of us with copper reserves.” , said Mr. Pacheco.

“In a world where copper is the ultimate conductor and where there aren’t many new deposits either, the price of copper looks very firm because the future looks very electric.”

Benchmark copper on the London Metal Exchange was down 0.5% to $8,367 a tonne on Friday after touching $8,122.50, down 25% from a peak in March and the lowest level since. February 2021. Other industrial metals also tumbled.

Mr Pacheco, a former energy minister appointed earlier this year, said the annual production target would be maintained at 1.7 million tonnes while he was in charge, including for this year. He said costs needed to be brought under control

“In this industry we are fighting with costs and that is why we have to be competitive,” he said.

The Chilean government said this week it would allow Codelco, which donates all its profits to the state, to keep 30% of its profits from last year to help fund an ambitious $40 billion investment plan until the end of the year. end of the decade.

“We have this portfolio of very large projects and the Chilean state has decided to change the dividend policy precisely to be able to finance these strategic projects not only with depreciation and debts, but also with reinvestments,” he said. declare.

The executive said the infusion of resources would keep the company’s debt “relatively stable”, currently at around $18 billion, although it is still looking for opportunities to go to the debt markets to improve its maturity curve.

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