Antofagasta Sees Copper Material Deficit Through 2008
By Chanyaporn Chanjaroen
March 13 (Bloomberg) -- Antofagasta Plc, the owner of three copper mines in Chile, said the global market for concentrate, a raw material smelted into metal, will be in ``significant'' shortfall this year and in 2008 because of ``low'' stockpiles.
Copper supply ``remains vulnerable to declining grades and other constraints including equipment availability, labor shortages and power and water supplies,'' the London-based company said today in a statement distributed by the Regulatory News Service that accompanied its full-year results.
Mining companies such as Antofagasta benefit amid shortages of concentrate because the processing charges imposed by smelting companies for turning it into metal drop. Smelting charges fell to $60 a metric ton this year while refining charges declined to 6 cents a pound. They were $95 a ton and 9.5 cents a pound respectively in 2006.
Copper production will drop 2 percent to 456,000 tons this year as output at all three mines falls, the company also said.
Prices for copper for delivery in three months on the London Metal Exchange have fallen 27 percent since rising to a record $8,800 a ton May 11. While copper will rebound this year, ``the exceptional average copper prices of 2006 might not be repeated,'' Antofagasta said.
Demand for molybdenum, a byproduct of the company's copper mining, will remain ``strong'' this year, helping prices to remain above historical averages, Antofagasta said. The company produces the metal at its Los Pelambres mine in Chile. Molybdenum is used to toughen stainless steel.
Production will increase 12 percent to a record of about 11,000 tons this year, the company said.
Market prices of molybdenum fell to $24.8 per pound last year, from $32 in 2005, the company said.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net .
Last Updated: March 13, 2007 08:27 EDT |
