Chile sees copper prices averaging $3 a pound in 2006
Source: Bloomberg
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Chilean Mining and Energy Minister Karen Poniachik expects copper prices to average $3 a pound this year, with gains the rest of the year amid "robust" demand for the metal used in wiring and pipes.
Copper will trade between $3.40 and $3.50 a pound through December, Poniachik said in an interview today in London. Copper has soared 58 percent this year as global mining supply lagged behind growth in demand led by China, the world's biggest buyer of the metal. The metal is about $3.38 a pound today in New York.
"Demand from China and other main markets continues to be quite robust and there is no sign that it may weaken," Poniachik said. Chile, the world's biggest producer of copper, will have lower output this year than 3.8 million tons last year, she added, declining to be more specific.
Codelco, the world's biggest copper producer, will start contract talks next month with workers at Codelco Norte, the company's largest division, according to Poniachik, who also is chairwoman of Codelco. Last week, workers at the Andina division settled on a new contract for a 3 percent salary increase, she said.
"We hope that as happened with Andina last week, we will have a good solution" in Codelco Norte, Poniachik said.
Chile needs to double its electric generation capacity by 2020 to meet expected demand, and will have to find replacements for Argentine natural gas as the neighboring country continues to cut shipments to supply its own growing demand.
The government is looking at developing a second natural gas plant in northern Chile, Poniachik said. It could be a "fast-track project to be finished in 2008" or "a more conventional" one to be finished in 2010. Suez SA, the Paris-based utility, is one of the companies that made an offer to build the plant, she said.
"We are working to have gas from everywhere" including Bolivia and Peru, Poniachik said.
The government has projects worth about $14 billion to expand Chile's energy sources, she said.
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