Xstrata Plc, a producer of metals and coal from Europe to Australia, said growth in mined copper output this year will be the lowest since 2002 as declining ore grades, bad weather and strikes restrict volumes.
Production will rise by an estimated 40,000 metric tons, about 1 million tons less than planned and the smallest gain since 2002, when output shrank by 207,000 tons, Chief Executive Officer Mick Davis said today in presentation slides. “Despite 10 years of investment, the supply side is still struggling to keep pace,” he said.
This year’s global copper deficit, estimated by Goldman Sachs Group Inc. to be the biggest since 2004, has resulted from a lower concentrate of metal in ore, storms in Australia and Latin America and industrial action at mines in Chile. Most of the copper producers missed output targets in the third quarter, Goldman Sachs said in an Oct. 27 report.
Xstrata’s copper output fell to 223,606 tons in the quarter from 233,647 tons a year earlier, while production at BHP Billiton Ltd. dropped 24 percent, in part because of lower grades and strikes at the Escondida project.