Critics claim that Chile is losing its competitiveness in terms of attracting small mining companies. This is not because Chile’s geologic potential has been exhausted- but rather, due to the structure of the mining business in the region.
Chile has the world's largest copper reserves and is also the largest producer and exporter of the metal. In 2011, Chile expects global copper output will reach 16.5 million tonnes, an increase of 345,000 tonnes over 2010.
Copper futures declined Tuesday morning, back-tracking from Monday’s gains as traders were skeptical over the state of the economic recovery. On the COMEX, March copper tumbled 2.3 percent, to $4.25 a pound. Copper ended up for a second consecutive day on Monday, as market sentiment focused on dwindling copper stockpiles.
Copper future rallied on mounting concerns that demand will outpace global supplies by as much as 600,000 tonnes in 2011.
Copper prices rose to record territory Tuesday, as a weak greenback boosted international investor’s demand.
Copper enjoyed a welcome relief rally last week; but on Tuesday, the recovery was snapped as negative consumer sentiment sent equities across the US and Europe downward.
Copper commenced Tuesday in positive territory, extending Monday’s winning streak on the back of the longest run of inventory declines in over a year. Copper is ignoring overall market sentiment as lower than anticipated earnings reports from both Goldman Sachs and IBM wreaked havoc on the American and European stock markets.
U.S. copper futures closed with strong gains on Monday after a $1 trillion emergency package in Europe helped restore confidence in the global recovery. Unfortunately, the relief was short lived, as the markets suffered losses upon opening on Tuesday.
BHP Billiton Limited has forced majeure in place at its Escondida copper mine in Chile, the world’s leading producer of the metal may end in the September quarter, almost a year after saying it may miss deliveries. For full story, click here
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