The uncertainty brought by the coronavirus outbreak has continued to hit the copper market, with prices falling significantly while miners step up their response to slow down the spread of the novel virus.
This year’s supply might suffer as a result, with countries also imposing restrictions on operations around the world to fight the virus. Last year, copper production reached 20 million tonnes, down slightly from 2018’s 20.4 million tonnes, according to the US Geological Survey.
Ryan Cochrane of Open Mineral told the Investing News Network (INN) the picture is changing very quickly, and numerous major operations are reducing workforces, delaying construction or ramp up activities, and a fair amount of smaller operations have been placed on care and maintenance.
The disruptions are expected to be at least a month, but probably longer, which will have a major effect on supply in 2020,” he said on March 31. “Clear indications of the effect of supply disruptions are being seen on the spot TCRC market, where terms have been falling quickly over the past few weeks.”
The strict measures by governments paired up with falling copper prices pose significant risks to global mine supply and project development, according to a report from Wood Mackenzie Research Director Nick Pickens.
“At this stage, we are not assuming mine supply from these countries will stop in its entirety. However, we believe there is a significant risk that disruptions will escalate, and breach 5 percent this year,” he said.
But for Kieran Clancy of Capital Economics the cutbacks to supply that have been announced (so far) won’t come close to offsetting the enormous virus-related hit to copper demand.
“Undoubtedly the key thing to watch is any signs that virus containment measures across the world are starting to be relaxed,” he told the Investing News Network on April 1. “Until then, copper demand will remain almost non-existent.”
For copper-focused investors wanting to keep up with the latest copper-producing operations being impacted by the COVID-19 outbreak, the Investing News Network put the below list of mines affected by the virus and those that haven’t seen material changes as of yet.
All news and data were current as of April 1, 2020. This article will be updated as new information becomes available — if you know of a copper producing mine that has been disrupted or not due to COVID-19 but is not listed, please email [email protected]
2019 production: 1 billion pounds
Following a national quarantine imposed by the Peruvian government, Freeport McMoRan (NYSE:FCX) temporarily suspended its Cerro Verde copper-molybdenum mining complex in the South American country on March 17. Last year, Cerro Verde produced 1 billion pounds of copper and 29 million pounds of molybdenum.
Peru has extended the measures until April 12, prompting Freeport to engage in discussions with authorities regarding health protocols which would enable Cerro Verde to conduct limited operations during the state of emergency, the company said on March 26.
Cerro Verde concentrating operations averaged 396,800 metric tons of ore per day in fourth-quarter 2019, approximately 10 percent above design capacity. The company said in its yearly report that it was looking to increase production to 420,000 metric tons of ore per day in 2021.