This year alone, around 300,000 tons of fine copper would be lost and the impact would extend to 2021.

The most worrisome case is Codelco, where 4 of the 6 deaths accounted for by the industry have occurred, which led the firm to stop production processes. Contagions exceed 2,600 nationwide.

In line with the advance that the pandemic has had in the country, the mining sector is seeing the number of infected among its workers grow.

Despite the fact that the number of infected remains lower compared to the number of workers in this sector, around 1%, the increase in deaths set off alarms.

To date, according to government figures, the companies have reported 2,621 infections and almost half correspond to the Antofagasta Region. While endowments have been reduced by about 40% at the sectoral level.

So far in the emergency, six deaths have been recorded, of which four correspond to the Northern District of Codelco, one to SQM and the other to Centinela, a task operated by Antofagasta Minerals.

The state’s situation is part of the crisis that the city of Calama is going through, which led them to announce the arrest of the Chuquicamata smelter, while the refinery will start operating at a third of its capacity, seeking to reduce exposure in these areas.

This plant is the most important that Codelco has and has a capacity to process more than 1.17 million copper concentrate per year, which will force the state company to modify its sales and decrease its fine copper commercialization.

The initiative also contemplates the decrease of about 400 people, the arrest of teams and the reduction of production rates in both areas. These units were also the ones that concentrated the largest number of infections within Chuquicamata.

“We recognize that the company has taken many measures, and what is announced today is good, but they are late. We proposed to change shifts and they did not listen to us, which meant that the actual outbreaks began in Chuquicamata. We know that the divisions cannot stop, because the country needs the resources provided by Codelco ”, explained the director of the division’s supervisors union, Duncan Araya, who assured that the company projects more than 500 infections in the coming days.

Meanwhile, the site operators made a call to paralyze the operation for 14 days, a period in which they asked to disinfect all the equipment, facilities, dining rooms and dressing rooms, in addition to the detailed planning of the return of the provisions to their work, avoiding new outbreaks of contagion.

The announcement was also valued by the Minister of Mining, Baldo Prokurica, who assured that with this “the spread of the virus will be avoided, a measure that today is seen as necessary due to the increase in cases in the area.” In addition, he announced that the national deputy director of Sernageomin will move to Antofagasta to intensify the inspection plan for the works in the area.

Production and price

In spite of the lower provision at the mine site, the copper production of the large mining companies has remained stable, and according to the figure as of April, the volume of 2019 to the same date was even slightly exceeded, which could be extended to May and June.

However, there is a consensus that the effects on production will be seen during the second semester. Codelco’s executive president, Octavio Araneda, acknowledged in an activity carried out online this week that “the second semester could be more difficult. I think that in the second semester it could be more impacted (production), but unlike Peru and other countries, Chile has maintained its production. ”

This effect could also be extended beyond this year. This is how Cochilco advances it, which in its latest projection was scam that only by the impact of the pandemic, the blow would be about 200 thousand tons of fine copper.

In this line they coincide in Plusmining, where they point out that the conservative estimate for this year is about 320 thousand tons, which is equivalent to 5.5% of the production expected for this year.

The executive director of the consultancy, Juan Carlos Guajardo, explains that these are conservative estimates if the situation continues badly, because a work stoppage is not considered, as Codelco recently announced. The expert announced that the effect of the pandemic on production is not yet in sight next year.

Meanwhile, these concerns are also having an effect on the price of copper, which closed yesterday with a slight rise of 0.16%, bringing the mineral to US $ 2.66 a pound, and accumulating an appreciation of 27% with respect to its lowest value seen in mid-March.

According to a Bloomberg report, the possibility that the measure announced yesterday by Codelco will be applied in other mines is counteracting concerns about an eventual drop in demand as the main economies fight against a new wave of coronavirus infections. Along these lines, UBS analysts now project a deficit of 300,000 tons for this year, compared to a previous estimate of a surplus of 900,000 tons.

Source: El Mercurio

Translated with Google Translator