Anglo American, Antofagasta Minerals and Codelco analyze impact of low copper, high mining costs and effect of the political year
They do not see a collapse in the value of copper, but believe that the country should increase productivity, take care of their business environment and have clear rules
For almost a year the relationship between these three executives was not entirely harmonious. The complex operation to achieve the 49% of the ex Disputada de Las Condes impacted in the mood. But when John Mackenzie, president of the copper division of Anglo American, Thomas Keller, CEO of Codelco, and Diego Hernandez, president of Antofagasta Minerals and former CEO of the state company found themselves convened by “El Mercurio”, affability was present. Among them even joked by Codelco bad time, given the refusal of the Government to the capitalization of state-owned utilities, the fluctuations in copper prices and the problems of industry costs.
They even took time to banter, as when asked about a possible tax reform and Keller said “At least it is a problem I don’t have! Everything we give to the treasury! “He said, sparking laughter from the audience.
Mackenzie, Keller and Hernandez managed three companies whose combined value exceeds U.S. $ 100 billion and are among the world’s largest mining.
Although copper path are concerned, they do not panic: “We all project medium and long term prices that are required to install new projects. If you ask the analysts, you will have prices ranging between U.S. $ 2.7 and U.S. $ 3.5 a pound. Now, the path of how to get to it is full of surprises, “said the chief executive of state mining.
“I think there may be volatility in the short term. But in the medium and long term, supply and demand are that sets the price trend, ” added Hernandez.
“For us, the future of copper fundamentals are very good in the mid and long term,” said Mackenzie. He explained that most analysts say that in the future China can not sustain these levels of growth, but even these growth levels are smaller, such is the size and needs of Chinese that copper demand will continue.
Less Expensive Projects
A good new expressed by mining executives is that costs of construction are falling and where it has been noticed is in the projects.
“We have already seen the peak (in the rise of new investments) by the slowdown in demand,” says Keller, who says that “the first aspect which verifies this phenomenon is in engineering, which clearly have lowered costs significantly “.
Another effect, Hernandez said, is that labor returns to mining areas, with workers normally work in the activity. With the copper boom there was a migration of unskilled workers northward. “Today you have people from Constitución who work at the north, there are people from Lumaco we went to look and continue to work in mining and not change places, make their home in the south and make 7 by 7 shift (a work week for a week of rest). “
This allows the existence of an airline like Sinami (Union of Industrial Assembly mining) or other leading mining workers. “It is the answer to a good objective market situation of people are moving by demand conditions from their homes, which are much further away from the mining operations,” explained Keller.
Source: El Mercurio
