Middle East war drives up Codelco copper costs in Chile

By Fabian Cambero

SANTIAGO, April 13 (Reuters) - ‌Price surges due ​to ​the Middle East war have raised costs for the world's top-producing copper miner Codelco, yet the Chilean state-run firm is still on track ‌to meet its 2026 production target, Chairman Maximo Pacheco told Reuters on ⁠Monday.

The mining company aims to produce 1.344 million metric tons of copper this year after dipping to ‌a quarter-century low in 2022 ‌and 2023, and hopes to lift output further to 1.7 million tons by 2030.

The Middle East war, however, pushed Codelco's cash cost up by at least ​10 cents per pound, "which is a lot," Pacheco said.

"The biggest challenge for the industry is operational continuity, and we've seen it becoming more difficult to produce copper ⁠every day," he added.

Codelco managed to somewhat insulate itself by buying enough sulfuric acid - needed for production - to ​cover the full year before prices started to rise.

"We can weather the current situation with sulfuric acid with relative ease," Pacheco said.

Codelco ​produced 271,300 tons of copper during the first ‌quarter, a dip from last year due to scheduled maintenance but otherwise within expected levels, Pacheco said.

He declined to estimate when El ⁠Teniente will reach production capacity, after an accident last year at the flagship mine killed six workers.

"It requires extensive study, geosciences, modeling, and redesign of our mining plan, and therefore we ⁠will take all the time necessary," he said. Codelco had previously estimated it could take about ​eight years for the mine to reach its pre-accident capacity.

Pacheco, whose term ends at the end of May, said the Middle East war has not hurt demand for copper, with fundamentals still ‌strong around the world and no major changes to Codelco's shipments.

He also noted that Codelco would be open to opportunities, if ‌profitable, to help transport copper produced in Argentina, where several mines are in development in ⁠the Andes mountains along the Chilean ‌border.

"I imagine there will ​come a time when they will bring it up for discussion," he said.

(Reporting by Fabian Cambero, Writing by Daina Beth Solomon; Editing by ‌Brendan O'Boyle)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• China does not seek 'sphere of influence' in ties with Pacific island nations, foreign minister says
• Global investors turn most bullish since February, BofA survey shows
• Resumption of hostilities in Middle East underlines instability, says BoE Governor Bailey