Mining News

Copper mining is Opec on crack, why is the price falling?

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Much like the reference in this piece’s headline, it’s a cliché to call a country the Saudia Arabia of something.  

Top search suggestion at the moment is the Saudi Arabia of wind. That’s Boris Johnson’s dream for the UK and from a leader with an affinity for hot air, perhaps not unexpected. 

The Saudi Arabia of lithium query takes you to a story about Chile, which is wrong. Neither is it Afghanistan as this article in the NYT would have it. It’s Nevada; Elon Musk confirmed it last year

The Saudi Arabia of sashimi is… well just google it. (it’s Palau – ed.) 

Chile is not the Saudi Arabia of copper either. 

It’s the Saudia Arabia, Iraq, UAE, Iran, Kuwait, Nigeria, Angola, Algeria, Venezuela, Libya, Congo-Brazzaville, Gabon and Equatorial Guinea of copper. 

Chile’s share of global copper output is on par with the combined output of the 13 members of Opec in the crude trade.  

In 2020 the South American nation produced 5.7m tonnes of copper out of a global total of 20.2m tonnes according to the US Geological Service. Opec countries were responsible for 24.3m of the 76.1 million barrels per day produced during March this year according to the US Energy Information Administration.


Chile and Peru together constitute close to 40% of world production, which is roughly the share of what is known as Opec+ (add Russia). And consider that Chile and especially Peru suffered frequent covid-related mining disruptions last year (not to mention blockades at some of the biggest mines and transport strikes). 

The concentration at the top is only going to increase. The Democratic Republic of the Congo could as soon as next year overtake China as no 3 producer when the Ivanhoe-Zijin JV, Kamoa-Kakula, adds 400,000ktpa to the country’s total (and doubling its contribution six years later). 

Apart from Rio Tinto’s much anticipated block cave at Oyu Tolgoi (330ktpa) in Mongolia on the Chinese border, the only near-production projects close to this size are in South America. 

Anglo American’s greenfield Quellaveco project (300ktpa) in Peru and Teck Resources’ phase 2 at Quebrada Blanca (295ktpa) in northern Chile will further entrench the two countries’ dominance. 

Playing with monopsony money  

As in other spheres, China plays the long game in mining.

It bagged the largest new copper mine to come on stream in decades – Las Bambas in Peru – by making its sale to a Chinese concern a requirement for approving the 2014 Glencore-Xstrata merger. 

In 2016 China Moly picked up Tenke Fungurume in the biggest lass Fungurume in the /spa Eqle/?s Fungurume in the

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