Maximo Pacheco, chairman of the board of directors of Chile's national copper company (Codelco), warned that the copper market has changed significantly: this year, the Democratic Republic of Congo (DRC) has replaced Peru as the world's second largest copper producer.
"First is Chile, second is the Democratic Republic of Congo, which has overtaken Peru to become the world's second largest copper producer," Pacheco said. "More production will come from Africa," he stressed.
According to the US Geological Survey (USGS), the African country will produce 2.6m tonnes this year, up 11 per cent from 2022, followed by Peru at 4 per cent and Chile at 2 per cent.
Ruben Arrieta, director of Wood Mackenzie, said at a seminar in Peru in the middle of this year that Congo's copper production last year was close to Peru's, which will produce 2.44 million tonnes in 2022.
alvaro Merino, research manager at Chile's national mining association (SONAMI), said it would take until the end of the year to know whether Congo would eventually catch up with Peru, but that the African country was expanding production aggressively. First, he explained, it was because of its geological background, with "ore grades much higher than those found in the Americas"; Second, foreign investment has poured into the Democratic Republic of Congo.
In its November report, the International Copper Study Group (ICSG) predicted that Congo's production would grow by around 7% this year, mainly due to the Kamoa mine expansion and other new or expanded mines.
Congo, in Africa's copper belt, is home to the Tenke Fungureme and Kamoa-Kakula copper mines, both of which are expanding, There are also Kolwezi, Mashamba, Kamoya and Kinsevere mines, as well as other mines. Experts also stressed that Congo has numerous copper projects, Examples include Lupoto, Lumembe, Musonoi, Kalongwe, Kalunkundi, Mutoshi and Kalumines, all of which are now in the development stage.
In the 1970s, Merino recalls, Chile and Zambia, which together with Zaire (now the Republic of Congo and the Democratic Republic of Congo) formed the Organization of Copper-producing countries, each producing around 700,000 tonnes of copper. At present, Zambia's copper production is 800,000 tons, while Chile has become the world's largest copper producer, with a production of 5.3 million tons, and is also the world's second largest producer of molybdenum and lithium.
"What has distinguished Chile for 50 years is that it has been able to use the appropriate institutions to tap its resource potential," he said.
In addition to the challenges facing copper-producing countries, there is another worrying trend: low inventories. While copper prices have risen, inventories remain at rock-bottom levels.
"Global inventories are at levels not seen in the last 30 years. If you look at how much copper is left, you'll find it's only enough for 10 days, "Merino warned. He explained that the metal shortage is due to financial investors holding positions in copper, which is the reason for the shortage, but this is not reflected in the copper price.
Experts at Goehring & Rozencwajg Associates, a natural resources consulting firm, said, "Given the low foreign exchange reserves and the rising supply-demand gap, we believe speculators will soon panic, as they did in late 2005 and 2006." Back then, low inventories combined with massive short covering sent copper prices nearly doubling in just six months. We are now in danger of repeating the 2005-2006 copper price surge."
