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Monday, November 19, 2018 - 1:14:36 PM
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Mining News Pro - Chile is set to deliver steady production growth of 4% next year, as the risk of labour strikes decreases and mines are upgraded, Fitch Solutions Macro Research says in a report, also warning that declining grades pose a downside risk to its long-term forecast
According to Mining News Pro - Fitch states that Chile’s copper mine production is forecast to grow by 2% in 2018, to 5.4-million tonnes, on the back of strong production increases from major mines. For example, Anglo American posted an increase of 54 100 t in the first three quarters of 2018, a 13% year-to-date growth over the same period last year.
Further, production from the Escondida copper mine, which is jointly owned by BHP Billiton, Rio Tinto, Jeco Corporation and Jeco 2, was not hampered by a mineworker strike this year and commissioned new concentrators in September 2017, which aided with higher production in 2018.
Codelco also showed a slight overall increase to 1.7-million tonnes of copper produced in the first half of 2018, compared with the first half of 2017, of 2.8%, despite declining ore grades.
Fitch highlights that the new Chuquicamata underground mine will offer support to Codelco’s copper mine production levels. The underground portion of the mine will initially add to Chuquicamata’s overland production as the mine switches to an underground operation over the next decade.
“The current plan forecasts a seven-year ramp-up period before full production is reached. Once fully operational, the underground portion will produce 320 000 t of copper a year.
“Owing to the ramp-up, and the projected start date in mid-2019, we expect to see this add to our 2019 copper forecast,” the firm states.
Moreover, Fitch reports the Michilla mine, which is owned by Haldeman Mining and is due to restart, shows improving investor appetite to mine in Chile. The mine will be restarted in 2019 as a medium-scale mine and will produce 170 000 t over the next ten years.
Antofagasta has raised its copper production guidance from between 705 000 t and 725 000 t in 2018, to between 750 000 t and 790 000 t in 2019, while expecting higher ore grades from its Centinela and Zaldivar mines, unlike most miners that are seeing declining ore grades.
“Mines who saw production decreases over recent quarters cited declining ore grades as one of the main contributing factors. Chile has seen the national average ore grade steadily decline over the last decade.
“As ore grades decline, it takes higher amounts of mined copper ore to be processed to reach the same level of copper concentrate output. This issue presents an attractive opportunity for miners to invest in new technology or upgrade equipment to improve operational efficiency,” Fitch says.
In terms of labour unrest, Fitch anticipates a lower possibility of miner strikes impacting 2019 copper production. Chilean copper mine companies received numerous threats of miner strikes over contract disputes in 2018, which is on the back of 2017 legislation giving miners more negotiating power.
Owing to this, many contracts were negotiated and agreed to, some with expiration dates of 36 months, therefore Fitch sees fewer opportunities for mineworkers to strike in 2019.
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https://www.miningnews.ir/En/News/301668
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