Non permanent bottlenecks hike prices for copper miners in Chile, Antofagasta CEO says

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SANTIAGO — The worldwide financial restoration has created bottlenecks in transportation and vitality provide which can be pushing up prices for world miners, the top of Chile’s Antofagasta Minerals instructed Reuters, although he mentioned he expects these hiccups to be short-term.

Copper costs have soared this 12 months as demand and financial exercise rebounds from pandemic lows however provide stays tight, a scenario that Antofagasta Chief Govt Ivan Arriagada mentioned was more likely to persist regardless of the bottlenecks. “These elements that introduce volatility within the short-term we imagine usually are not sufficient to make up for good fundamentals (within the copper market),” Arriagada instructed Reuters in an interview simply previous to the LME Week convention in London. “Our imaginative and prescient is that we’re going to have costs which can be just like what we’re seeing at this time within the close to future.”

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Copper hit $4.50 per pound earlier this 12 months however has settled at round $4.10 per pound, a degree “extra consultant” of what’s going to be seen in 2022, Arriagada mentioned.

Antofagasta’s high govt mentioned troubles with vitality provide – one in every of a number of bottlenecks – had been unlikely to linger in Chile as the necessity for heating declines within the fast-approaching southern hemisphere summer time, although different points may persist.

Some tools crucial for the corporate’s ongoing initiatives, for instance, had been transported to Chile by way of air amid ongoing issues with maritime freight prices. However he known as {that a} “one-off” scenario and mentioned he anticipated vitality and maritime freight prices to fall to extra regular ranges subsequent 12 months.

“The price pressures related to bottlenecks in logistics, we imagine that they’re for probably the most half transitory, not…everlasting results,” he mentioned.

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CLIMATE WOES

The London-listed miner, majority owned by Chile’s Luksic household, has mentioned 50,000 tonnes of manufacturing may very well be in danger subsequent 12 months due to a extreme drought that has hobbled its operations.

However a desalination plant underneath development at its flagship Los Pelambres mine, anticipated to start working within the second half of 2022, is nearing 60% completion, Arriagada mentioned, which may assist take up among the slack.

“At present we’re working local weather and water availability fashions in an effort to refine that estimate,” he mentioned, noting that this month the corporate would current new projections.

The political local weather in Chile has additionally stored miners on their toes.

Arriagada mentioned a invoice to sharply hike taxes on miners seems to be headed in direction of “better moderation,” and mentioned a invoice to ratchet up restrictions on corporations that function round Chile’s many excessive mountain glaciers ought to deal with science, not politics.

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Antofagasta has maintained its long-term capital expenditure plans and mentioned he hopes uncertainty in Chile, which can also be re-writing its structure, will start to settle.

The corporate expects to make an funding resolution on enhancements at its smaller Centinela mine in northern Chile within the second half of 2022, after finishing engineering design work.

“That places it in a time frame that’s after the tax dialogue of this Congress (…) and possibly additionally after the discussions of the Constitutional Conference,” he mentioned. (Reporting by Fabian Cambero, writing by Dave Sherwood Enhancing by Marguerita Choy)