Copper Projects in ‘Geopolitical Risk’ Areas, Codelco Says
About two-thirds of new copper projects are located in areas of “higher geopolitical risk,” according to Codelco, the world’s biggest producer of the metal.
Some new mines may face political pressure, nationalism or opposition from local communities, said Rodrigo Toro, corporate sales vice president at the Santiago-based company. He spoke today at Metal Bulletin’s 26th International Copper Conference in Madrid.
“This, of course, will alter the return on investment,” Toro said. “If you are running a high risk, the only way to go ahead is to request a higher return on investment. The return is directly related to the risk you are running. Not all of them will be successful.”
Southern Copper Corp. had to reschedule the startup date for its Tia Maria project in Peru after deadly protests in 2011 sparked by concern the mine would use water needed for farming. Rio Tinto Group has rejected demands from Mongolia’s government for a larger share of profits from the $6.6 billion Oyu Tolgoi copper mine.
“A total investment needed to develop new projects keeps rising,” Toro said. “Also, operational cost is higher.”
To contact the editor responsible for this story: Claudia Carpenter at email@example.com