This isn't the article I was talking about but a quick google found it ...many other articles out there...
A “MAJORITY” OF MINERS ARE NOW BUST IN THIS TOP COPPER NATION
admin | November 23, 2015 |
Copper,
Metals |
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The copper market got a serious warning late last week. From a leading insider in the planet’s largest producing nation for the red metal.
That’s Chile mining industry group Consejo Regional Minero de Coquimbo (Corminco). A regional association that includes some of the country’s biggest mineral companies, especially in the copper space — including Antofagasta, Glencore and Teck.
In an interview with local press, Corminco’s president Juan Carlos Saez said that copper prices have now fallen to the point where a “majority” of his group’s members are unable to make a profit.
“We hope this is already the lowest level,” said Saez. “Because it’s below the limit of exploitation for the majority of miners in the country.”
That’s a serious appraisal. Especially in the world’s number one copper-producing nation, responsible for 31% of global output in 2014.
We have started to see
some production cuts in the Chile copper sector recently. But Cominco’s president Saez said things could get much worse over the coming weeks.
Because of the end of government aid to the sector.
Since September, Chile’s state mining corporation Enami has been subsidizing copper producers. By
paying above-market prices to purchase copper products from miners.
In total, these subsidies have boosted the effective copper price across Chile to $2.30 per pound. Well above current international prices, which stand at approximately $2.10.
That buying program however, is scheduled to finish at the end of December. Local press in Chile have suggested that the government is studying what to do following the expiration of the program — and there’s no certainty the subsidies will be continued.
Saez told the papers that further subsidies are “tremendously important not to lose more jobs”. He added that, for the copper sector, “the only way to continue is to have the credit in 2016”.
Some of this is undoubtedly posturing to get the best deal for miners. But if the credit is indeed discontinued, the financial hit to Chile’s copper industry is going to significant, with prices falling 20% overnight.
That’s a critical event every mining investor should be watching over the new few weeks.
Here’s to giving credit where credit is due,
http://piercepoints.com/mining-investment-copper-chile-price-production-cut-off/
