Anglo American Aims To Boost Copper Production In Chile

Key Highlights

• Anglo American is confident it can return to higher levels of copper production in Chile despite water restrictions and lower ore quality.
• Approving a $3 billion-plus overhaul at the Los Bronces mine greatly boosts Anglo’s production output, as tight global supplies and rising demand keep copper prices high.

Anglo American Plc, a London-based mining company, is working towards restoring its Chilean copper production to higher levels of past years after seeing a decline as a setback rather than the new normal. Despite water restrictions and lower ore quality, this year’s production aligns with guidance. 

Anglo Chile’s CEO, Patricio Hidalgo, confirmed that the company’s production in Chile, centred around the Los Bronces mine and a stake in the Collahuasi venture, is on track to reach its company guidance of between 530,000 and 580,000 metric tons.

Anglo American Sees The Return To Higher Copper Production Levels In Chile

On 17th Apr 2023, the Chilean government’s approval of a $3 billion-plus overhaul at Los Bronces greatly boosted Anglo’s production output. “Los Bronces and Collahuasi both have very good growth potential and the capacity to return to past production figures — we are working towards that,” said Hidalgo. However, he also acknowledged that the firm would have a few years of low ore grades due to mine developments and the nature of the deposits.

Chilean Copper Industry Faces Challenges But Remains Optimistic For Future

Anglo’s copper production struggles reflect a trend in Chile where output has stagnated as: 

1. Ore grades deteriorate
2. Water constraints exacerbate a prolonged drought
3. Tough permitting hinders progress

Some companies have held off on investments to see how efforts to raise taxes pan out. Despite these challenges, tight global supplies and the prospect of rising demand in the shift away from fossil fuels have kept copper prices high.

Hidalgo is optimistic about the future of copper prices, stating that “in a world of decarbonisation, we see a significant gap between demand and supply in the long run, which at some point will materialise in higher prices.” 

He applauded the Chilean government’s willingness to discuss modifications to its copper royalty bill, which will go to a senate vote this week. Hidalgo is also closely monitoring stability factors, hoping for something akin to the current guarantees.

“Our commitment to the $10 billion project portfolio in the next decade remains unchanged,” said Hidalgo. This includes $6.5 billion at Los Bronces and Collahuasi, $1.8 billion for water, and the rest on climate change-related initiatives. 

Despite the challenges faced in Chile, Anglo American Plc is determined to continue its commitment to growth and contribute to the copper industry’s long-term sustainability.