According to Mining.com, Fitch Solutions (Fitch Solutions) National Risk and Industrial Research Team predict that global copper production will increase by 7.3 million tons by 2031 as some projects in Chile , China and Democratic Congo are put into production.
Fitch expects global mining copper production to grow by an average annual rate of 3.2% from 2022 to 2031. Driven by rising copper prices and growing demand, global copper production will increase from 21.9 million tons in 2022 to 29.2 million tons in 2031.
Chile
This market analysis agency believes that Chile, the world's largest copper producer, will see slightly decline in the short term, mainly due to the continued impact of the drought. The production of the mines of Los Bronces of the British and American Group and the Los Pelambres of Antofagasta Company was damaged. In addition, the labor-management disputes of the Chilean National Copper Company and the unplanned maintenance of the Vale Company are also important factors.
However, in the long run, under the leadership of large mining companies, this country with output accounts for 1/4 of the world's output will show a production growth trend. The production of BHP's Escondida copper mine will rebound significantly after the epidemic is over. The construction of the second phase of Quebrada Blanca project of Teck Resources will be completed. Codelco's $1.6 billion Salvadore copper mine project is under construction, which can increase the life of the mine by 47 years.
"The long-term downside risk depends on the possibility of the implementation of mining tax, which is what the Chilean government hopes. However, the original proposal was strongly opposed by Congress, so the impact on this aspect is limited", Fitch believes.
China
Fitch expects China's mining copper production growth to drop from an average annual average of 6.9% in the past 10 years to 1.0%, mainly due to the closure of low-grade copper mines and the delay in capacity expansion. New projects such as the Purang copper mine of Yunnan Copper Industry and the Kulong copper mine of Zijin Mining will offset the decline in production in other places.
Peru
Fitch expects Peru production to slow sharply in the short term compared to previous forecasts, mainly because community protests have imaged key mine production, including Las Bambas of Minmetals Resources and Cuajone copper mines of Southern Copper. The authors of the report do not believe that the country's copper production can return to pre-epidemic levels by 2024.
Fitch believes that China's role in Peru's copper industry is becoming increasingly important. The Peruvian Energy and Mining Ministry expects that Chinese mining companies' investment will reach US$10.2 billion in the next 10 years.
Democratic Congo
Driven by the expansion of the Kamoa Kakula giant copper mine of Ivanhoe Mining and Zijin Mining Company, the copper production in Democratic Congo will exceed 2 million tons for the first time next year, and will reach nearly 3 million tons in 2031.
Glencore's Mutanda copper-cobalt mine, the Deziwa project jointly launched by China Minmetals and Democratic Congo State Mining Corporation (Gecamines) will further promote strong production growth in the central African country.
price plummeted
Since setting a record high in March, copper prices have been falling. The copper price on the New York Mercantile Exchange has recently fallen to $3.28/pound ($7230/ton), a new low in 10 weeks.
Fitch expects copper prices to be US$8,400/ton in 2023 and US$11,500/ton in 2031, mainly considering the strong long-term demand expectations and the expanded structural gap.
Source: Global Geological and Mineral Information System
Disclaimer: This article only represents personal opinions and is not used as an investment reference. Investment is risky, so be cautious when entering the market.
