Chile, the world's largest copper supplier, is expected to produce 25% of the world's total copper and gold production in 2021 and 2022, up 3.7% to 4.397 million tons in 2021 and 6.6% to 4.686 million tons in 2022.
From 2021 to 2025, the average annual growth rate of Copper and gold mines in Chile will be 3.2%, reaching 4.968 million tons in 2025. In 2026-2040, the annual average growth rate is expected to be lower at 1.3 per cent, reaching 6.043 million tons in 2040.
As many of Chile's mines age and the grade of copper ore declines, mining companies dig deeper underground, increasing production costs. Over the past 15 years, copper ore grade has declined from 1% to 0.6%-0.7%.
In The case of Escondida, the grade of copper ore decreased by 35.7%, from 1.29% in 2010 to 0.83% in 2020. The decline in copper ore grade leads to an increase in unit production cost, requiring more copper ore to be mined to produce the same amount of copper. Investment costs are also rising because of longer mining times and more copper ore fragmentation.
Chile's state-owned Codelco, the world's largest copper producer, is in the midst of a 10-year, $40bn programme to refurbish and renovate many of its ageing mines.
Codelco began commercial production in 2020 at the first phase of its EL Teniente expansion project, adding 50 years to its mining life. By 2023, when the expansion is completed, the mine will be producing 500,000 tonnes a year, making it one of the largest copper mines in the world.
In August 2021, Codelco began work on the RajoInca mine, a $1.38 billion expansion project that will extend the mine's mining life by 47 years, or 50% to 90,000 tons per year of copper concentrate capacity by 2070.
The RjoInca project will convert Salvador copper mined underground since 1959 to above-ground production, with a 40% improvement in ore grade. The expanded mine is expected to start production in 2022.
Chile's SXEW (solvent extraction electrodeposition) copper production accounts for more than one third of the world's solvent extraction electrodeposition copper production, but the refined copper production share is significantly reduced because Chile is suitable for leaching and THE DEPLETION of SXEW copper resources, Chile's refined copper share is expected to decline 8.8% in 2021, 7.4% in 2025, and 5.9% in 2040. Copper cathode production is expected to cease by 2040.
Peru, the world's second largest producer of copper concentrate, accounts for about 13% of global copper concentrate production and is expected to grow 6.4% to 2.207 million tons in 2021 and 10.4% to 2.43 million tons in 2022. In terms of RECOVERY from COVID-19 and the commissioning of new projects, Peru's copper concentrate production is projected to grow at an average annual rate of 6.0% to 777,000 tons in the medium term (2021-2025) and 1.3% to 3.347 million tons in the long term (2026-2040).
Southern Copper has announced plans to invest $8 billion in major developments in Peru, including the Tiara Maria Copper project, which is expected to produce 120,000 tonnes of cathode Copper per year over 20 years. The mine contains 2.6 million tonnes of Copper, with an initial investment of $1.4 billion. Southern Copper announced development of Tia Maria in 2010 and, after several setbacks, plans to start production in 2024. In addition, Southern Copper is moving forward with the $2.5 billion Michquieley project and the $2.6 billion Los Chancas project expansion.
