Without Chile, Glencore challenges Codelco
After acquiring the assets of Xstrata, the Swiss-based mining company launched to dispute the leadership of world copper production to Codelco and Freeport. Although Chile focuses an important part of the operations of the Swiss in the world, short-term investments are not foreseen in the country
The top global copper market, so comfortable that Codelco has held for decades, could change hands in the coming years.
The first company to threaten the Chilean state Company this year was Freeport McMoran mining which in turn is a member of Codelco in El Abra operation.
According to U.S. estimates, with base in Phoenix, will reach a sales level of 2.1 million tons, enough to relegate Codelco to second place worldwide.
However, the seat of Chile’s state Company leadership is threatened by another international company.
This time the threat comes from Switzerland and is called Glencore. The mining company, who was for years moved to secondary sites in the copper industry, jumped to the acquisition of Xstrata Copper, which in turn had inherited Falconbridge assets, among which include 44% of Collahuasi and Lomas Bayas operation in Chile, besides the 49% of the Energía Austral hydroelectric project.
Indeed, after these purchases, Glencore was installed as the third largest producer of copper, just after the Chilean Codelco and the U.S. Freeport, and beating industry giants such as BHP Billiton, Rio Tinto and Anglo American.
New status
The new role that the European company Glencore acquired took her to be ambitious. The first one is to increase its copper production, which is estimated to reach Codelco in three years, not counting projects, on their own, develop Chilean state Company.
The helmsman´s Glencore copper area, Telis Mistakidis revealed the master plan of the company in a recent meeting with investors, which stated that the objective of the firm regarding copper production is to reach 1.71 million tons by the year 2015, a figure which represents an increase of about 500 000 tons, equivalent to the annual output of a field as Los Pelambres or Los Bronces.
In total, the company now has 14 mines around the world, plus three foundries, five refineries and 14 electrowinning (EW) Plants in 36 countries. The company’s own staff reaches 27 000 people, to which are added 25 000 contractors.
Without Chile
How to increase 500 thousand tons of copper in just two years? The mining Company maintains ongoing projects that will allow it to reach that figure, which is determined by a strong investment, mainly for its operations in Africa and also in Peru, where Glencore has interests in the Antamina mine (in joint venture with Teck, Mitsubishi and BHP Billiton) and in Las Bambas.
The latter site was initially going to be sold, but that process has been frozen.
Currently, it carries out an expansion project for about U.S. $ 5,900 million, which will increase its production to 450,000 tons per year starting in the second half of 2015.
What about Chile? The main project that Glencore keeps locally is the expansion of Collahuasi, which will allow this operation, which the Swiss company owns 44%, to increase production to 1 million tons per year by installing it in the second place of the list of top producing mines in the country after Escondida, controlled and operated by BHP Billiton.
But Collahuasi expansion is still in preliminary stages and is not even included in the portfolio of projects of it partners, either Glencore itself or Anglo American, which owns the other 44%. This, because the partners decided to await the outcome of productive recovery plan being implemented by the new CEO of the operation located in the Region of Tarapaca, Jorge Gómez, before taking any decision on whether to initiate the process of environmental processing or the implementation of this project, which will require no less than U.S. $ 6 billion in investment. In a recent interview, Collahuasi´s CEO stated that the partners are not among its priorities the expansion of the site and that the greatest concern today is the standardization of activities. Nor are emerging developments in any of the other operations of Glencore in Chile: Punitaqui-mine belonging to Glencore before the merger with Xstrata, and Lomas Bayas.
Source: Pulso
