Chile’s mining woe supports copper prices
“Declining ore grades” is not a phrase to set the heart aflutter. Even investors in the metals and mining sector may struggle to get excited about the subject after years of hearing it being deployed as a justification for higher prices.
But the issue has rarely been such a potent force in the market. The fall-off in ore quality at ageing mines is behind a stagnation in copper production in Chile, the world’s top miner of the metal with a third of global output, since 2006.
The start of this year has seen an acceleration of the trend: Chilean copper production was down nearly 8 per cent year on year in January, and by about 20 per cent from December.
That is a shockingly large number. To put it in context: the drop in Chilean production in January is equivalent in terms of its impact on the copper supply-demand equation to a 5 percentage point acceleration in Chinese consumption growth.
Analysts have been scratching their heads ever since the headline numbers were reported a fortnight ago by INE, Chile’s statistics institute, to determine what could be behind the sharp decline.
The grim reality is that no single factor drove the fall: instead, according to mine-by-mine data recently published by Cochilco, Chile’s state copper commission, nearly every large mine in Chile suffered a fall in production in January from December. Most of Chile’s largest mines saw double digit percentage falls in output year on year.
Read the rest of the article online here: Chile’s mining woe supports copper prices - FT.com
March 15, 2012
February 27, 2012
China joins Venezuela in #LasCristinas huge gold project
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China joins Venezuela in huge gold project
China joins Venezuela in huge gold project
Venezuela will develop its huge Las Cristinas gold project in partnership with Chinese state investment company CITIC, President Hugo Chavez announced on Friday.
The government last year cancelled Toronto-based Crystallex International's permit to develop the long-troubled mine project south of the Orinoco river.
Russian-Canadian miner Rusoro Mining, based in Vancouver, had hoped to partner with Venezuela in what could be Latin America's largest gold deposit. Las Cristinas has estimated reserves of 17 million ounces.
In a meeting with Chinese investors, Chavez said he was firming "an agreement with CIT-IC for the joint development of Las Cristinas." He gave no more details.
Chavez, who was speaking at his last meeting before flying to Cuba for cancer treatment, has brought Venezuela ever closer to China in terms of business and political ties during his 13-year rule of the South American OPEC member.
Development of the Las Cristinas mine, near a town bearing the name of the mythical golden city of El Dorado, has dragged for decades due to a mixture of bureaucratic, political and financing issues.
Some locals say the mine is cursed.
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