Anglo American may crash the global copper market
Rising copper supplies are not exactly what copper producers would like to hear amid steadily falling metal prices since the beginning of the year. However, Anglo American's $ 5 billion copper project at Kellaveco in Peru will begin supplying an additional 330,000 tonnes of copper from 2022.
The mine may have sufficient reserves to support a century of production at low costs, the company said in a statement. According to the Financial Times, this is a real license to print money.
Two adjacent mines in the same area have been mined for over four decades at much deeper than the current boundaries at Kellaveco, and it is assumed that the mineralization is much more extensive than has been identified in the current sample.
Copper demand is expected to rise in the next decade due to electrification of cars and the expansion of renewable energy sources. At the present time, however, the market is overcrowded, with metallurgical plants reducing and practically not supporting prices.
The recent rise in prices has been followed by another fall as one of the largest producers, Antofagasta, staved off a workers' strike by reaching a labor agreement with a union at a mine in Los Pelambra.
Some consolation for copper producers may come from the fact that the offer from Kellaveco will not appear on the market for several years, even if we assume that Anglo American will be able to launch its project on time, which is by no means guaranteed. For example, one of the company's other major projects, the iron ore mine in Minas Rio, was brought online after a long delay and was horribly over budget.