My OperaChile and Copper Prices
Monday, March 1, 2010 7:24:21 PM
Copper mining has long been the mainstay of Chilean exports and accounts for almost a third of all foreign trade, and Chile is the world’s largest copper producer representing almost a third of global copper production. Copper has been mined since pre-colonial times in the area between central Chile and southern Peru. Between the 1850s and 1880's Chile became the largest copper producer and exporter in the world but production more than halved by the end of the century.
Some mines have had to suspend their production because of the earthquake, and damage to the infrastructure will no doubt cause delivery delays. Although the largest copper mines are to the north of the area hit by the earthquake, the infrastructure damage means that around 17 percent of the country’s copper production was disrupted. Seventeen percent of Chile’s copper production equates to almost 5 percent of world copper production. Given however that copper mines will have some above-ground stock the export of copper from Chile may see little disruption - and officials in Chile have promised to honour its export commitments.
Never the less the market seems to be in panic, and the price of copper has jumped to the highest level in five weeks. Due to the short-term panic the price could remain at a very high level for some time.
A bit ironically the large copper deposits in Chile are a result of the subduction of the Nazca Plate beneath the South American Plate - the same subduction that caused the huge earthquake a few days ago and the largest earthquake ever 50 years ago.
Subduction zones give and take.
Some mines have had to suspend their production because of the earthquake, and damage to the infrastructure will no doubt cause delivery delays. Although the largest copper mines are to the north of the area hit by the earthquake, the infrastructure damage means that around 17 percent of the country’s copper production was disrupted. Seventeen percent of Chile’s copper production equates to almost 5 percent of world copper production. Given however that copper mines will have some above-ground stock the export of copper from Chile may see little disruption - and officials in Chile have promised to honour its export commitments.
Never the less the market seems to be in panic, and the price of copper has jumped to the highest level in five weeks. Due to the short-term panic the price could remain at a very high level for some time.
A bit ironically the large copper deposits in Chile are a result of the subduction of the Nazca Plate beneath the South American Plate - the same subduction that caused the huge earthquake a few days ago and the largest earthquake ever 50 years ago.
Subduction zones give and take.
- http://news.bbc.co.uk/2/hi/business/8542510.stm
- http://www.reuters.com/article/idUSTRE61Q23320100228
- http://www.businessweek.com/ap/financialnews/D9E5SPD00.htm
- http://www.businessweek.com/news/2010-02-28/almost-5-of-global-copper-output-disrupted-standard-bank-says.html
53north # Wednesday, March 3, 2010 2:16:05 AM