Copper prices rose for the second day in a row amid the suspension of mining in Chile. The largest state-owned mining company Codelco is facing the consequences of a fatal incident at one of the world’s largest underground mines. About this informs Bloomberg.
An earthquake-induced tunnel collapse at the El Teniente mine killed six people. This facility provides more than a quarter of the company’s total production. Underground work has been halted since the accident, and it is currently unknown how long the shutdown will last and how it will affect Codelco’s production plans.
In 2023, El Teniente produced 356,000 tons of copper, making it Codelco’s most powerful mine. This volume is equivalent to more than a month’s import of refined copper to China. Against this background, the price of copper on the London Metal Exchange rose by 0.4% to $9,672 per ton.
The suspension of production took place against the background of high competition among the world’s copper smelters for raw materials. Processing fees, which are the main source of income for such businesses, remain very low in the spot market. This has already forced a number of factories in the Philippines and Japan to reduce production or stop operations altogether. In China, production figures are so far stable, but there is growing concern that the industry has reached its limits.
Investors are also closely monitoring the situation at other large mines, including Ivanhoe Mines Ltd.’s Kamoa-Kakula facility. in the Democratic Republic of the Congo. The company’s management expressed confidence in restoring the mine to its previous volumes.
At the same time, other metals are also showing growth or stability against the backdrop of a weaker dollar. Iron ore futures in Singapore rose 0.9% to $100.95 a tonne, paring their biggest weekly drop since April. Aluminum and zinc also rose in price.
