Editorial: Debt-heavy Codelco forecasts muted growth – by John Cumming (Northern Miner – April 12, 2017)

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Two highlights of the copper calendar — Cesco Week and CRU’s World Copper Conference, both held in Santiago, Chile in early April — have come to a close, with attendees reporting a sense of cautious optimism among the world’s top copper producers and refiners, as supply growth starts to level off and copper prices modestly rebound.

Santiago-based Cesco (from Centro de Estudios del Cobre y la Minería, or Centre for Copper and Mining Studies) was founded in 1984 as a private, non-profit organization, and describes itself as “independent and plural … promoting social legitimacy and confidence in Chile’s mining industry as a development engine,” and seeks to monitor and provide “information and quality analysis in novel formats.” Each year the organization puts on Cesco Week, including the Cesco Dinner, as well as the similar Asia Copper Week in Shanghai.

While much talk in the copper community over the first quarter focused on short-term supply disruptions at the world’s three largest copper mines — Escondida in Chile, Grasberg in Indonesia and Cerro Verde in Peru — the presentations in Santiago tackled some of the industry’s longer-term problems, including lower head grades, deepening mines with harder rock, water shortages and sociopolitical challenges.

Chilean state-owned Codelco — the world’s largest copper producer, headquartered in the world’s largest copper-producing nation — best exemplifies the industry’s current spirit of planning for growth while recognizing financial and technical constraints.

(Codelco has unique challenges as a state-owned enterprise, though, including the sticky fact that 10% of its sales must go to the Chilean military — a law that has held it back from operating in regional rival Peru where its private-sector competitors have been so active.)

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