On Tuesday, Diego Hernandez, president of Chile's national mining association (SONAMI), said he was optimistic that copper prices would remain high for the next two to three years, but was cautious about talk of a copper supercycle.
Copper prices have surged to record highs this year on the back of strong demand, sparking widespread debate among analysts and market watchers about how long the bull market in the metal can last.
Hernandez said copper prices would benefit in the medium term from the electric vehicle revolution and the boom in renewable energy, but in the longer term the market should be cautious.
It is worth noting that the last copper supercycle began in 2002, after China's entry into the World Trade Organisation the previous year and the start of rapid economic growth led to a surge in demand for the metal, which reached $9,000 a tonne in May 2006.
The Chilean government's plan to levy a heavy tax on copper mining, with the revenue to be used for economic recovery after the pandemic hit the global economy, has met with strong opposition from mining companies as copper prices continue to rise amid the coronavirus pandemic. That would make Chilean miners less competitive and drag down their investment plans, Hernandez said.
"We hope the Senate will be sensible and come to an agreement with us to allow the mining industry to continue to contribute to the country's economic development," Hernandez said.
The union at Chile's Escondida copper mine, the world's largest, said on Tuesday it had reached a tentative agreement with BHP Billiton and that workers would vote on a new contract offer in two days' time. Fears of supply disruptions at Escondida eased after the risk of a strike eased. (interface)
