Copper news, page-76

These comments below arrived in my email inbox overnight.

They are from a recent field trip to Chile by Janes Henderson analyst
by Tal Lomnitzer – Senior Investment Manager

The Janus Henderson Explorer series follows our investment teams across the globe and shares their on-the-ground research at a country and company level.

Copper plays a vital role in the transition towards clean energy, being a key component in renewable infrastructure and electric transportation. Chile is the largest copper producer, supplying 27% of global copper production in 2021, and home to the two largest mines in the world, Escondida and Collahuasi. Copper production has declined because of water issues and declining ore grades at major mines, combined with labour woes and insufficient rates of reinvestment.

On a recent research trip I met with various producers, including national mining company Codelco. The meetings suggested that there may be further risk to consensus copper production forecasts due to ongoing environmental and operational challenges, compounded by an uncertain taxation outlook as Chile seeks to increase royalties imposed on mining companies. Some companies such as Teck Resources and Lundin Mining are looking to increase production, bucking the trend, but at an aggregate the level the headwinds to copper production in Chile make one incrementally more positive on the outlook for copper in 2023 and beyond.