(Bloomberg) – Political uncertainty in Peru and Chile, which account for about 40% of global copper production, favors future metal prices as producers are reluctant to pull the trigger on investments, according to Freeport- McMoRan Inc.
Speaking to analysts on Thursday, the miner’s chief executive Richard Adkerson said the changing political winds in the two South American copper giants are part of the challenges mining faces in meeting growing demand as the world moves further away. of fossil fuels.
Adkerson, a 74-year mining veteran, plans to work with industry in Peru to engage with the incoming government of leftist Pedro Castillo, who has promised to use a larger portion of the ore’s windfall to fight poverty. In Chile, Freeport will put off a major expansion as the country debates tax increases, drafts a new constitution and heads for a presidential election as voters push for higher social spending to address inequalities.
“We really don’t know what the outcome is, ultimately,” Adkerson said. “This will favor future copper prices.”
Copper hit a record earlier this year, as economies emerged from covid lockdowns at a time of supply disruption and acceleration of a clean energy shift that will require far more of the metal used in wiring. Prospects for increased demand come after years of cuts in exploration and development when prices were low and supply grapples with rising social and environmental expectations and falling ore quality.
Still, Adkerson offered some hope that the industry can avoid drastic political changes in Peru, pointing to stability agreements and examples of other candidates moderating their approaches once in office.
In a separate call Thursday, Newmont Corp. CEO Tom Palmer said the company expects to make a decision by December on an investment proposal at the Yanacocha mine in Peru. Newmont will likely begin to interact with the new cabinet over the next six months, and he is optimistic that it will be well received, he said.
Original Note: South America Politics Are Bullish for Copper, Freeport Says (1)
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