Band Fabian Cambero
SANTIAGO, February 22 (Reuters) – Codelco, Chilean state-owned company, the world’s largest copper producer, the The recent surge in the price of the red metal is a “good opportunity” to generate liquidity for investments and maintain debt, but has warned that it could also drive up costs for miners, a senior executive told Reuters on Monday.
The price of copper topped $ 9,000 per tonne for the first time on Monday since 2011, as the burgeoning global economic recovery prompted demand to explode for the commodity, essential for the global construction and construction sectors. manufacturing.
In Codelco’s first public comments on how the price hike could affect its business, vice president of sales Carlos Alvarado said they would help strengthen the company’s financial position, but that it was little likely they will radically change its existing plans.
“Our investment plan is based on long-term decisions that are not affected by specific price situations,” Alvarado told Reuters.
The coronavirus pandemic has caught Codelco amid a 10-year, $ 40 billion initiative to modernize its sprawling but aging mines, which have suffered in recent years from sharply declining ore grades.
“This situation gives us a good opportunity to contribute to our cash flow and to fund our investment portfolio, instead of increasing debt,” said Alvarado.
But rising expectations would likely also cause goods and service providers to raise prices, Alvarado added, driving up overall costs for the state-run miner.
“In [this] price scenario, there is upward pressure on the cost of our production, ”Alvarado said.
The executive said it was still too early to know whether the soaring world copper price represented a new “super-cycle”, similar to that seen in the early 2000s following tectonic demand from industrialization and urbanization in emerging countries.
(Reporting by Fabian Cambero, written by Dave Sherwood; Editing by David Gregorio)
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