Chile to Have No New Copper Mine in 2002, First Time in 5 Years
2002-03-20 18:30 (New York)
Santiago, March 20 (Bloomberg) -- Mining companies don't plan
to open any new copper mines this year in Chile for the first time
in five years because of stagnant demand for the metal.
William Hayes, president of Placer Dome Inc. in Latin America
and head of the Chilean copper mining companies association, said
the slowdown reflects the drop in copper prices. Copper prices
have fallen to an average of 75 cents per pound in the past four
years from $1.1 per pound in the mid 1990s.
``There are projects waiting for better times,'' Hayes said
in an interview after a news conference.
Lower demand for the metal and a drop in investment has
reduced Chile's copper production, a setback to the government
efforts to bolster economic growth. No new Chilean copper mines
are scheduled to open in 2003 or in 2004, the Chilean Copper
Commission, a state-run studies group, said.
Vancouver-based Placer Dome has put development of its $1.3
billion gold and copper mine Cerro Casale on hold until prices for
gold rise to $300 per ounce from $292 now and copper prices rise
to more than 95 cents, said Hayes.
Copper prices traded at 76.6 cents per pound on the Comex
division of the New York Mercantile Exchange for delivery in three
months. Prices have climbed 16 percent this year.
Flat Demand
Flat demand for the metal will likely keep prices from
surging, said Hayes. He expects global demand for the metal to
stay little changed at about 15 million tons this year from last
year.
For now, companies are investing only to expand existing
mines. State-run Codelco plans to increase output at its El
Teniente mine in central Chile, while Australia's BHP Billiton
Ltd. has an expansion underway at Escondida, the world's biggest
copper mine.
Both Codelco and Escondida cut back production after prices
for copper dropped in November to a 14-year low of 60.85 cents per
pound, adding to a 1.5 percent decline in Chilean copper
production in January from a year earlier.
Investment in Chilean mines dropped to $236 million in 2000
from a peak of $2.4 billon in 1998, the government said. Chilean
copper output will likely be little changed this year at 4.76
million tons from 4.75 million last year, after output had tripled
since 1990, the National Mining Society said.
--Heather Walsh in Santiago (562) 638-6820 or
hlwalsh@bloomberg.net or through the New York newsroom (212) 318-
2730. Editor: Kraus |
