First Mining Drc-Zambia March -April 2020 digital edition First Mining Drc-Zambia March - April 2020 digital | Page 7

NEWS
NEWS
Copper
production to grow 3%
annually until 2029 globally
G
lobal copper mine production will
see steady growth over the next
few years, as a number of new
projects and expansions come online,
supported by rising copper prices and
demand, Fitch Solutions forecasts in a
new report.
Fitch analysts predict global copper mine
production to increase by an average
annual rate of 3.1% over 2020-2029,
with total output rising from 20.3 to 26.8
million tonnes over the same period.
The ratings agency research arm
suggested technology and productivity
advances could effectively combat
long-term cost increases from declining
average grades, and higher material
movement requirements, to maintain
output rates at some mines. New
projects in Australia and the Americas
(and, potentially, Africa) could lift mine
supply from 20.3 million tonnes in 2020
to 26.8Mt by the end of the decade, Fitch
said.
In 2020, Fitch forecasts Chile to
increase production modestly by 0.5%
to 5.89 million tonnes. Growth will be
led by the ramp-up of BHP’s Spence
Growth Option over H2 2020, increasing
production at Lundin Mining’s Candelaria
mine and a rebound in production from
mines hampered by heavy rains in the
beginning of 2019.
Fitch says these developments will
outweigh the declines in production
from Antofagasta’s Centinela operation
due to lower ore grades and from Teck
Resources’ Quebrada Blanca.
Downside risks to production will stem
from declining ore grades across the
country, unfavourable climate, protests
that hamper supply chain operations and
union strikes, analysts predict.
Fitch forecasts Chinese copper mine
production to increase at an average
clip of 1.8% per year over 2019-2028,
compared with an average growth rate of
6.9% over the past 10-year period. This
slowdown in production growth will be
driven by closures of low-grade copper
mines in China and delayed planned
capacity expansions.
Growth in domestic production will still
be positive as new projects come online.
A weaker Chinese yuan against the US
dollar will help reduce costs for domestic
Chinese mines, says Fitch. China, being
the world’s largest consumer of refined
copper and third-largest producer of
mined copper, will look to develop foreign
assets to improve its resource security.
Chinese copper miners will remain
committed to investing in copper
deposits abroad to secure access to
high-grade, low-cost material. For
instance, in October 2019, Zijin Mining
announced that it would spend $146
million to increase its interest in Ivanhoe
Mining. The purchase will make Zijin
the second-largest shareholder in the
company developing the Kamoa-Kakula
copper mine in the Democratic Republic
of Congo (DRC).
As for the DRC, Fitch revised the 2020
outlook from 8% growth to a 15%
contraction after Glencore put the
Mutanda mine, which produced nearly
200,000t of copper and 27,000t of cobalt
per annum, on care and maintenance in
November.
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