Escondida copper output steadies
After two years of sharp declines, output at world's largest copper mine expected to remain roughly level at around 1.08m tonnes 'til 2012
SANTIAGO (Reuters) - -
The Escondida mine, the largest copper mine in the world, will manage to keep production steady this year after two years of sharp decline, a BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) executive said on Wednesday.
Output at Escondida, which produces about 6 percent of global copper supply, has been a source of concern for several years, with production falling sharply in both 2008 and 2009 due to disruptions as well as deteriorating ore quality.
The mine should produce around 1.08 million tonnes of the red metal in 2010, and between 1.05 million and 1.1 million tonnes annually from 2010 to 2012, Diego Hernandez, the Base Metals President of operator BHP Billiton, told reporters on the sidelines of the Cesco/CRU copper conference.
He said that copper prices are likely to go up in the near future due to tighter supplies and because companies are extracting copper of lower grades.
"We've got an optimistic view in the medium and long term. (Looking) at the short term we're glad ... because the prices are quite good," Hernadez said.
"It's hard to say to what extent (investment) funds influence the price in the short term. We hope prices won't stumble, but if it happens it would be for a limited period of time and in the medium and long term we should have higher prices."
He said the copper industry needs higher prices because the projects under development will extract copper of lower grades and therefore will have higher costs.
The mining executive said BHP Billiton is considering reducing its investment budget for Escondida.
"We'll make a decision regarding investment at end 2011 or beginning 2012," he said.
Output at Escondida, which is majority-owned by diversified miner BHP Billiton, fell slightly over 12 percent in 2009 to 1.103 million tonnes from 1.255 million tonnes in 2008. History of Escondida production.
© Thomson Reuters 2010 All rights reserved