The industry's top event, Cesco Week, kicked off in Santiago, Chile on Monday (April 17).
London's copper inventories fell sharply last week to 51,550 tonnes, the lowest level since 2005. The lowest inventories in almost 18 years sent executives, bankers and traders flooding the conference to keep an eye on the government's latest word on the mining sector.
Chile is the world's largest copper producer, but in recent years due to declining mineral grades and other factors, production has shown signs of stagnation. Not only that, but Chile's government last year banned mining in glaciers, protected areas and areas crucial to protecting water systems, putting about a fifth of the country's copper production at risk.
Demand for copper is likely to grow as the world converges on electric vehicles and renewable energy. Richard Adkerson, CEO of Freeport McMoran, a major copper producer, told the press, "Looking at the near-term outlook, I can say that demand for copper will continue to be strong."
Copper futures on the London Metal Exchange have risen every month since October, and at one point earlier this year topped $9,400 a tonne. CRU Group, a consulting firm that advises organizers of the show, predicts copper prices will rise to more than $10,000 a ton from near $9,000 now.
But that price has not significantly pushed producers to speed up mining, as new deposits have become more expensive and difficult to develop. CRU management consultant Robert Edwards said that by 2026 and 2027, the market would start to move into deficit - where demand is greater than supply - as miners are reluctant to commit to major new-build projects on current levels.
In a bit of good news, the Chilean government on Tuesday conditionally approved the expansion of Anglo American's Los Bronces complex, reversing environmental regulators' decision last year to ban the mine.
In a statement, Anglo welcomed the Chilean government's decision, saying it would support the company's continued investment in the project and ensure the long-term output of the world's largest copper mine.
Chile's mining minister said on Friday that he expected the current "production decline" in the local copper industry to recover in the coming years. He added that dialogue with industry had helped ease concerns about tax reform and plans for a new constitution.
