Tightening Copper Market Seen Spurring Investment, Peru Saysby
Mines minister says copper prices may keep rising in 2017
Minister met with global mining executives last week in Lima
Peru expects copper’s improving outlook to spur interest in developing new projects and reverse an investment slump in the world’s second largest producer.
While this month’s 21 percent price rally may be short lived, mining executives are anticipating a more sustainable recovery in 2017 and 2018 as demand catches up with supply, Energy and Mines Minister Gonzalo Tamayo said Friday in an interview at his offices in Lima.
“We may be entering a scenario of slightly better prices that support the development of projects,” Tamayo said after speaking with the heads of miners including Freeport-McMoRan Inc., Newmont Mining Corp. and MMG Ltd. last week in Lima during a summit of Asia Pacific nations.
The higher prices are a boon to Peru where mining investment has slumped since 2013, bringing an end to a boom that doubled its copper output. Chinese companies may lead the way in developing new mines and are showing renewed interest in a portfolio of $5 billion to $6 billion of mainly copper and iron-ore projects, Tamayo said.
The Chinese government ratified its support for the projects during President Xi Jinping’s state visit to Lima on Nov. 21.
Copper futures are heading for the best monthly advance since 2006. The price was $2.681 at 1:12 p.m. on the Comex in New York on Friday.
Peru overtook China as the world’s second-largest producer of copper ore last year, as output jumped 24 percent to 1.7 million metric tons, beating China by just 35,000 tons, according to Bloomberg Intelligence. Ramp-ups at Freeport’s Cerro Verde mine and MMG’s Las Bambas will help Peru reduce the gap with No. 1 producer Chile.