Chile Copper Output at Six-Year Low Underscores Market Tightness – by James Attwood (Bloomberg New – March 31, 2023)

(Bloomberg) — Mines in the biggest copper-producing nation are struggling just as demand for the wiring metal is expected to accelerate in the shift away from fossil fuels.

Chile, which accounts for a quarter of the world’s mined copper, posted its lowest monthly production in six years on Friday. Hours later, state-owned behemoth Codelco said its output woes of 2022 will only get worse this year as it strives to tap new areas of its aging deposits after decades of underinvestment.

Mines are being hampered by water restrictions in a prolonged drought as well as a string of operational setbacks and project delays as they battle deteriorating ore quality. That’s good news for copper bulls but it’s intensifying fears of a looming shortage given copper is a key material in the energy transition, used in everything from electric vehicles to wind turbines.

“It has been a complex year in terms of production, costs and surplus generation, which has challenged us to find ways to improve our future performance,” Chief Executive Officer Andre Sougarret told reporters in Santiago Friday.

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