Future of Copper Production Thrown Into Doubt by Worker Cuts – by James Attwood, Jackie Davalos and Winnie Zhu (Bloomberg News – June 23, 2020)

https://ca.finance.yahoo.com/

(Bloomberg) — Skeleton crews are running Chile’s massive copper mines at full tilt, skimping on maintenance and earthworks. It’s a short-term fix that carries risks for future output.

When the pandemic hit and mines around the world shut, those in Chile figured out a way to keep churning out copper for Chinese factories. They kept non-essential staff at home and introduced longer schedules for streamlined crews of 60-70% of normal levels. The latest data show it’s working, with output up even as Chile becomes a virus hot spot.

But they’re doing it by postponing projects and maintenance and homing in on areas that are easiest to access. Such practices can raise the risk of unforeseen stoppages and, if done for too long, constrain future production.

Given Chile accounts for more than a quarter of the world’s copper, disruptions there can rock global projections. It’s one of the reasons prices of the metal are holding up, according to Bloomberg Intelligence senior analyst Andrew Cosgrove.

“You can’t do it forever — maybe a couple of quarters,” he said. “Thereafter, it starts to negatively impact your output profile.”

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