Market disruptions give copper prices a bump
The price of copper saw an uptick of one percent on March 13 and was at $2.63/lb on March 14 after a number of disruptions to the market began to take effect.
In Peru, workers are Freeport-McMoRan’s Cerro Verde Mine began an indefinite strike, halting output of about 40 kt/m (44,000 stpm).
In Chile, union workers on strike at BHP Billiton’s Escondida copper mine rejected invitation by the company to return to negotiations as worker demands were not adequately addressed, leaving the parties without an obvious path forward.
And in Indonesia, Freeport-McMoRan’s shelved operations at its Grasberg Mine as it continues to battle with Jakarta over mining rights that has paralyzed its operations.
Freeport's Indonesian unit has shelved plans to invest $1 billion a year in long-term underground expansion at the world’s second-biggest copper mine, the company said in a memo to all staff on Feb. 28, citing a stoppage to Grasberg exports since mid-January resulting from changes to Indonesian mining rules.
Copper ore output from the Grasberg Mine in Papua will be cut to 95 kt/d (105,000 stpd) a day in 2017 from 140 kt (154,000 st) previously estimated, Reuters reported.
In a statement, the 2,500-member Escondida union, which has been on strike since Feb. 9, said BHP did not sufficiently address workers’ demands in its latest invitation sent to the union.
Reuters reported the union demands include that BHP agrees not to trim benefits in the existing contract, that shift patterns should not be made more taxing for workers, and new workers be offered the same benefits as those already employed at the mine.
“After revising its content, the union members have decided that unfortunately this response presents a series of inconsistencies and falsehoods,” the statement said.
“The union will maintain the strike for an indefinite amount of time,” it added.
It was the third failed attempt to restart dialogue during the strike, which has pushed global copper prices higher due to supply concerns.
Escondida, majority owned by BHP, produced slightly more than 1 Mt (1.1 million st) of copper in 2016, making it the world’s largest copper mine.
Rio Tinto and Japanese companies such as Mitsubishi hold minority interests in the mine.