Copper produced in DR Congo (MNM Pic)
Head of base metals operations, Peter Beaven, says its possible that the market may have a “small surplus” of supply this year and 2014.
(Bloomberg) –
BHP Billiton Ltd., the world’s largest mining company, said copper supplies may exceed demand this year and next on growing stockpiles and as the Melbourne-based company ramps up output at its Escondida mine in Chile.
It’s “possible” that the market may have a “small surplus” of supply in 2013 and 2014, Peter Beaven, head of the company’s base metals operations, told reporters in Santiago April 4. Escondida’s output will grow 10 percent a year through 2015 when it reaches a record 1.3 million metric tons, he said.
As copper executives gather in Santiago this week for an annual dinner organized by industry group Cesco, Chile, the top producer, sees slowing demand growth in China, the largest consumer of the metal, Mining Minister Hernan de Solminihac said in an April 4 interview. Global copper usage will trail supplies by 97,000 metric tons this year, Barclays Plc said April 4.
“We’ve seen a run up in the stock,” Beaven said. “We’re are still selling everything we are contracted to sell in China.”
Chinese purchases of copper, mainly used in power cables and electrical wire, are set to rise 5 percent this year, compared with 11.7 percent in 2012, de Solminihac said April 4 when he delivered an official government forecast.
Copper futures fell last week, dropping 1.7 percent to 334.40 cents per pound on April 5. Inventories in warehouses monitored by the London Metal Exchange have risen more than 80 percent to 579,600 metric tons.
Spence Decision
BHP boosted output at Escondida in the Atacama Desert by 32 percent in 2012 by 1.076 million tons, compared with the year before, according to Chile’s state-run copper statistics agency Cochilco.
BHP, the 57.5 percent owner of Escondida, dismantled a crusher located inside the main pit that now spawns more than 2.5 kilometers (1.58 miles) wide to access richer ore.
The company may also be able to expand its Spence copper mine, also in northern Chile, to more than 300,000 tons from 166,700 tons produced in 2012, Beaven said. BHP will need to review the rising energy and labor costs of mining in Chile before deciding to go ahead with an expansion at Spence, he said.
–Editors: James Attwood, Keith Gosman
To contact the reporter on this story: Matt Craze in Santiago at mcraze@bloomberg.net
To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net
©2013 Bloomberg News
