Due to drops in copper output from state-owned Codelco and BHP’s Escondida mine, Chile saw its total copper production drop in November by 0.6% year-on-year down to 481,800 tonnes, according to the Chilean Copper Commission (Cochilco) report published on Tuesday.
When compared to the previous year during the same period, Codelco experienced an output drop of 7.4% in November, decreasing to 153,800 tonnes. This was a total 0.4% drop in production in 2021 so far for the copper company. Codelco is approaching its 50th year since it was created in 1976, and mainly focuses on the exploration, development, and refining process of copper.
The world’s largest copper mine, BHP’s Escondida, also experienced an output drop in November. Extraction fell 11.6% compared to last year, totaling 80,300 tonnes for the month. In 2021 through November, the mine recorded a 14.5% drop in output.
BHP’s Escondida is the world’s biggest producer of copper concentrates and cathodes. The copper deposit is located in the Atacama Desert in Northern Chile, 170km southeast of Antofagasta. The name ‘Escondida’ actually means ‘hidden’ in Spanish because it is hidden by hundreds of meters of overburden. Oppositely, the Collahuasi copper mine, which is a joint venture by Glencore and Anglo American, reported a 5.1% year-on-year rise in production to 50,700 tonnes, according to Cochilco.
The biggest recent change for Chile was the election of a new president, Gabriel Boric. Many in the mining and copper industry have concerns regarding new rules and regulations surrounding the mining sector that Boric has already begun to discuss.
Boric has already pledged to oppose the $2.5 billion iron-copper mine known as the Dominga mine, after years of legal battles back and forth. He is passionate about the environment and believes the high pollution that would come from this mine would not be worth what it could produce and create.
Boric, who is 35, will be the youngest leader in the history of Chile since President Salvador Allende, and plans to make a plethora of changes to the nation, including drafting a new constitution. The 2022 year will be a time of change and adaptation for the entire mining industry under his new environmentally focused changes and rules. While Boric will be aiming for an environmentally friendly and ESG mining environment, there may be compromises to be found yet, as slowing down an industry that is so critical to the Chilean economy would not be feasible without serious consequences.
Models Prove the Chilean Upward Trend
Chile is the world’s largest copper producer, from January until August 2021, Chile’s copper production totaled 3.73 million metric tons. In 2020, Chile’s copper production was about 5.7 metric tons, accounting for approximately 28.5 % of the global copper production that year.
According to trading economics models, Chilean copper production is projected to trend around 540.00 thousands of tonnes in 2023.
Not only is Chile the world’s largest copper producer, but they also have some of the biggest lithium reserves in the world. Boric in the past has criticized privatization in the mining sector and would like to see the state have its own lithium firm, but has not touched on these plans again since pledging to create one.
As the global pandemic and supply and demand continue to change and update, and Boric takes his place as president in March, Chile can expect to see lots of changes in the upcoming 2022 year.