Local copper production expected to grow 6.5% to 5.74Mt in 2010 - Chile, Regional

BNAmericas.com

June 7,2010

Chilean copper output is expected to rise 6.5% to 5.74Mt in 2010 compared to last year, driven by increases in both concentrate and cathode production, state copper commission Cochilco said in its Q1 copper market trends report.

Cochilco said the expected increase in concentrates will be due to a recovery in production from BHP Billiton's (NYSE: BHP) 57.5%-controlled Escondida mine and higher production from Freeport-McMoRan Copper & Gold's (NYSE: FCX) Candelaria.

In addition, the expansion at Antofagasta Minerals' Los Pelambres mine, the completion of the phase I expansion at state copper producer Codelco's Andina division and the start of operations of the sulfide ore processing project at Canadian Teck's (TSX, NYSE: TCK) Carmen de Andacollo mine will contribute to the increase.

The rise in cathode production will be driven by BHP Billiton's Spence mine achieving full capacity, and higher production from Codelco's Gaby and Quadra FNX's Franke mines, Cochilco said.

For 2011, Cochilco has forecasted total output of 5.87Mt. Further production capacity increases from Los Pelambres and Andina, and Antofagasta Minerals' Esperanza project starting operations at full capacity will boost the nation's concentrate production.

Meanwhile, cathode production will see a drop next year due to depletion of reserves at several deposits, such as the El Abra JV between Freeport and Codelco.

Global mined copper production will see a slight drop of 26,000t to 15.9Mt in 2010, partially due to delays in the development and startup of new projects, the report said. In 2011, mined copper output is expected to increase 2.2% to 16.3Mt.

Production increases during 2010-11 will be led by Chile with 478,000t, the report added.

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