Peru’s copper production declines year-on-year despite higher August production

News Analysis

24

Oct

2024

Peru’s copper production declines year-on-year despite higher August production

During the first eight months of the year, Peru’s copper production reached 1.76Mt, a 0.7% y-o-y decline. However, August production increased by 10.5% y-o-y, primarily owing to higher grades at Antamina.  

Peru’s August copper production totalled 247kt, a 10.5% y-o-y increase, mainly due to Glencore’s Antamina mine, for which a 26.5% y-o-y rise in output was reported owing to higher grades. Furthermore, Freeport’s Cerro Verde and Southern Copper Peru’s production rose by 5.2% y-o-y and 11.2% y-o-y, respectively. However, from January to August, Peru’s copper production reached 1.76Mt, a 0.7% y-o-y decline. Project Blue forecasts that Peru’s copper production will fall to 2.59Mt in 2024 vs 2.75Mt in 2023, with lower output at Las Bambas, Quellaveco, and Cerro Verde more than offsetting higher production at Antamina. MMG’s Las Bambas mine has been facing frequent conflicts with local communities since it started to operate in 2016, becoming a recurrent issue. Copper production in Peru could benefit later in the decade from a recovery in production at Las Bambas and the extension of Chinalco’s Toromocho mine. New projects, such as Southern Copper’s Tia Maria and Teck’s Zafranal, are also expected to contribute to output at the end of the decade.  

Peru is an example of the structural issues faced by Latin America’s copper industry, including declining grades, social unrest, rising costs, and resource nationalism. In 2024, the Democratic Republic of the Congo’s copper production is forecast to reach 2.89Mt, exceeding Peru’s forecast production thanks to higher output at Ivanhoe’s Kamoa-Kakula and CMOC’s Tenke Fungurume and Kisanfu mines.  

Although the concentrate market remains tight, the CSPT’s guidance for Q4 TC/RCs was recently lifted to US$35/t and US$3.5c/lb from US$30/t and US$3.0c/lb, suggesting weakening demand from Chinese smelters. Project Blue forecasts that the copper market will remain balanced in Q4 with a potential surplus, implying stable prices fluctuating around the US$9,500/t mark.  



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