8th Apr 2014 08:21
LONDON (Alliance News) - The chief executive of Chilean mining company Antofagasta PLC told Reuters on Monday that despite the market for copper facing its first supply glut in four years, the price of copper may have found a bottom.
Chief Executive Diego Hernandez said the worst of the worries about the implications of a Chinese economic slowdown for copper prices may have passed.
The news comes as copper prices fell to three-and-a-half-year lows, according to Reuters, after a bond default by a Chinese company increased fears about credit problems in the world's second biggest economy.
"We think the Chinese economy is fairly solid," Hernandez told Reuters. "It may have some problems, but they're minor."
Hernandez added that, with first quarter production on target from Antofagasta, and other major deposits coming online globally, the copper market could tilt to a small surplus.
In March, the company reported a sharp drop in net profit for 2013, as a 1.6% increase in copper production could not offset the fall in commodity prices, combined with higher costs.
However, Hernandez told Reuters on Monday that its major USD1.9 billion Antucoya copper project is on time and on budget and the company's financing needs are covered.
The company expects to produce 700,000 tonnes of copper in 2014.
Copper is a key metal for some of the major mining companies on the London Stock Exchange. BHP Billiton PLC produced 439,900 tonnes in 2013 and last week announced that it was mulling an overhaul of its operating portfolio to focus on up to five commodities, including copper.
Rio Tinto PLC increased copper production 15% in 2013 to 631,500 tonnes, Anglo American PLC upped copper production 24% in 2013 to 214,000 tonnes, and Glencore Xstrata PLC increased its copper production 30% to 695,600 tonnes in 2013.
Antofagasta shares were up 0.9% Tuesday morning, Rio Tinto shares were up 1.2%, and Anglo American shares were up 0.4%, putting all three in the top ten FTSE 100 risers. BHP Billiton shares were up 0.1%, and Glencore shares were down 0.1%.
http://uk.reuters.com/article/2014/04/07/chile-copper-antofagasta-idUKL2N0MZ0TI20140407
By Tom McIvor; [email protected]; @TomMcIvor1
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