- Write by:
-
Monday, September 18, 2023 - 22:12:30
-
178 Visit
-
Print
Mining News Pro - Chile’s Codelco is ending long-term contracts to sell copper concentrate to Chinese clients from 2025, bidding to broaden its product offering to them after evaluating its production outlook, five sources with direct knowledge of the matter said.
The sources said Codelco is aiming to replace exclusively copper concentrate deals with others that include concentrate and value-added intermediate products such as blister and anode which are derived from concentrate and can be turned into copper metal or cathode.
Some Chinese customers have protested against the changes, but will have to accept new contract negotiations that include intermediates because they will need Codelco’s concentrates at a time when deficits are expected, the sources said.
The Chilean miner wants to restructure its sales strategy and agreements because of uncertainty about whether it can meet its contractual obligations, the sources said.
“Some measures adopted are due to the normal management of Codelco’s commercial product portfolio and not to availability adjustments and/or lower production,” Codelco said in response to a request for a comment.
“Codelco continually updates its contracts according to the prevailing dynamics in the market.”
Operational problems at the state-owned miner saw its production slip last year to about 1.46 million metric tons, the lowest in around a quarter of a century and output has slipped further this year.
Codelco is expected to produce between 1.31 million to 1.35 million metric tons of copper a key material for the power and construction industries.
Output at the world’s largest copper producer has been dropping despite $15 billion invested in flagship mines including El Teniente and Chuquicamata where costs have overrun significantly, according to an influential industry body.
The sources, all of whom have long-term contracts with Codelco, said they had been receiving termination notices from Codelco from July to August and that the company wanted to start new agreements with different terms.
Two of the sources said Codelco was ending their evergreen supply contracts from 2025. Evergreen contracts introduced by Codelco in 2018 are two-year and three-year deals which roll over annually, in which customers can be assured of certain amounts a year.
Codelco accounts for 29% of Chile’s copper production. Chile’s congressional committee in late August launched an investigation to review Codelco’s corporate structure and project delays.
China is the world’s biggest buyer of mined copper with its import volume accounting for over 60% of the world’s total. The world’s largest consumer of industrial metals bought 25.3 million tonnes of copper concentrates last year, according to International Copper Study Group.
The global copper concentrate market is expected to see a steep deficit during 2025-2027 as Asian and African smelters ramp up capacity, outpacing mine supply.
Short Link:
https://www.miningnews.ir/En/News/627385
Oxford Economics Australia has released data showing mine maintenance spending may be hitting its peak. But what does it ...
Copper climbed above $10,000 a ton as predictions for tighter global supplies and rising consumption in electric ...
Canada’s mining industry is pushing for an carveout to the federal government’s proposed increase to capital gains ...
Iron ore futures fell to their lowest in more than two weeks, pressured by an inventory accumulation at Chinese ports ...
Copper output in Chile, the world’s largest producer of the metal, edged down in March, data from copper commission ...
Panama’s president-elect has ruled out talks with Canadian miner First Quantum Minerals until it drops multiple ...
Botswana President Mokgweetsi Masisi vowed to protect the country’s interests, including its 15% stake in diamond giant ...
Europe’s largest copper producer Aurubis AG reported first-half core profit above expectations on Wednesday, helped by ...
China issued draft rules on Wednesday to regulate its lithium battery market, after rapid expansion in the sector hit ...
No comments have been posted yet ...