Owned copper giant Codelco forecasts ‘very firm’ copper despite recent drop – zimo news


© Reuters. FILE PHOTO: Maximo Pacheco, then Chile’s energy minister, speaks at the Chilean Congress in Valparaiso, Chile, on May 17, 2016.REUTERS/Rodrigo Garrido

Fabian Cambero

SANTIAGO (Reuters) – Chile’s state-owned miner Codelco, the world’s largest producer of the red metal, despite recent sharp losses, its chairman Máximo Pacheco told Reuters in an interview. Copper prices are expected to firm.

The comments came as copper posted its biggest weekly drop in a year as investors worried that central bank efforts to curb inflation could stifle global growth and reduce demand for the metal.

“We may be in a temporary turmoil in the short term, but what matters here is the fundamentals, and the supply-demand balance looks very favorable for those of us with copper reserves,” he said.

“In a world where copper is an excellent conductor and there are not many new deposits, copper prices are looking very strong as the future looks very electrified. »

Benchmark copper on the London Metal Exchange fell 0.5% to $8,367 a tonne on Friday after hitting $8,122.50, down 25% from its March high and at its lowest level since February 2021. Other industrial metals also fell.

Former energy minister Pacheco, who was appointed earlier this year, said the annual output target, including this year, would remain at 1.7 million tonnes during his tenure.He said costs need to be controlled

“In this industry, we compete on cost, and that’s why we have to be competitive,” he said.

The Chilean government said this week it would allow Codelco, which donates all profits to the state, to retain 30 percent of last year’s profits to fund an ambitious $40 billion investment plan until the end of the century.

“We have this very large portfolio of projects, and the Chilean government has decided to change the dividend policy to be able to finance these strategic projects, not only through write-offs and debt, but also through reinvestment,” he said.

The executive said the injection of resources would keep the company’s debt “relatively stable”, currently at about $18 billion, but would still look for opportunities to tap into the debt market to improve its maturity curve.

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