In conversation with Razones Editoriales, Juan Carlos Guajardo, executive director of Plusmining, explained the reasons behind the biggest rise since 2018 in the price of copper. “It is very paradoxical, it is totally counterintuitive, nobody expected this when the pandemic broke out,” he said.
The price of copper closed this day at 3 dollars a pound on the London Metal Exchange, exceeding this value for the first time since mid-2018.
The Minister of Mining, Baldo Prokurica, celebrated the increase and assured that “this means that we are going to have a greater reactivation of Chilean mining” and that this means “a light at the end of the tunnel.”
Regarding this, the expert assured that the rise in the price of the metal “means that what we produce has a better value, therefore we have higher income and that improves the possibilities that exist to meet other needs, thinking about tax revenues.”
To understand the phenomenon, Guajardo explained that the rapid recovery of the Chinese economy -one of the largest copper consumers in the world- played a fundamental role and that due to the difficulties in the production of countries like Peru, Panama and Brazil, generated a higher demand, compared to a declining supply.
According to the specialist, the price of the metal was also driven by the injection of liquidity into the market by governments to face the crisis, so investors have opted for raw materials, such as gold and copper.
“Production in Chile was very little affected by the policies of operational continuity, with contingency measures to avoid paralyzing production and a very strict sanitary control”, something that according to Guajardo could have an impact in the future.
“Each additional penny in the price of copper for a whole year means around 50 million dollars more for the revenue of the treasury,” he revealed.
Source: Radio Usach