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According to Antofagasta CEO Ivan Arriagada, the copper market has solid fundamentals despite the current market volatility and will maintain high prices for at least the next 12 months.
During the CRU-CESCO World Copper Conference in Santiago, Arriagada also reported that the company is still trying to develop its Twin Metals project despite the Biden administration’s refusal to renew its licences.
When it comes to copper prices, Arriagada informed that his forecast is based on the key role copper plays in the energy transition, especially with electric cars. “In the short term, in the next 12 months, the important thing is that we have a market with solid fundamentals. There is a relatively tight environment due to supply chain conditions, inflation, and all of that means we expect prices to remain at the levels they have been at recently, which are good prices.”
However, the world economy is entering a phase of lower growth in the midst of the conflict in Ukraine and this will need to be considered in the future, particularly in 2023.
The company maintains its target of producing 660,000-690,000 tonnes this year. This factor includes the impact of the drought at its flagship Los Pelambres mine, which the company plans to compensate for with a desalination plant in the second half of the year.
Antofagasta’s intention is to reach a production level of 900,000 tonnes by 2026. The company has the mineral resources to support this projection and a major investment plan.
Antofagasta’s board must decide whether to go ahead with plans for a new concentrator plant at its Centinela mine by the end of the year, amid political uncertainty due to a new left-wing government and the drafting of a new constitution.
Antofagasta suffered a setback in its Twin Metals project in the US after the renewal of two federal licences was suspended. The suspensions have affected a significant portion of the company’s mining operations, but do not affect the rest of the company’s licences.
The company is considering the best legal action to reverse these decisions. Nevertheless, the company expects to be able to implement the project by the end of the decade.
Arriagada reported that the company remains open to any interesting acquisition opportunities to increase its portfolio, although they are currently very limited.
Neighbouring Peru remains a point of interest despite ongoing political turmoil and other local challenges. Antofagasta has a team working in Peru looking for exploration targets that could be attractive especially for projects with a long-term perspective.
