The world's biggest copper miners increased output for a third consecutive quarter late last year, pushing operations hard to cash in on record-setting prices, a Reuters survey showed on Friday. Production restarts and expansion projects by 11 of the biggest publicly listed miners helped to boost output 2 percent in the fourth quarter, corporate reports showed last month. The figures exclude Chile's state-owned Codelco, which accounts for around 11 percent of the world's mined copper.
While small, the production gain is significant as it suggests that miners are starting to have some success offsetting worsening ore qualities - including from top producer Freeport McMoRan - with more quantities. "A lot of them are trying to get every pound out of the ground ... even the lower quality stuff," said Bart Melek, Vice President and Director of Commodities, Rates Research & Strategy with TD Bank Financial Group.
Output from the miners, who produce about a tenth of the world's copper, rose to 2,004,980 tonnes in the quarter. Codelco produced 1,262,000 tonnes of the metal in the first nine months of 2010, largely in line with the 1,273,000 tonnes produced in the January to September period of 2009.
London Metal Exchange copper prices rose to record highs last year, clearing the $9,000 per tonne level for the first time in December. It continued the rally this year, peaking at $10,190 in mid-February. "As the price of the commodity rises, the returns get pretty phenomenal," said Casimir Capital's managing director Wayne Atwell, who has more than 35 years of experience in the field of investment analysis for the metals and mining industries.
Freeport McMoRan Copper & Gold saw output in the quarter decline as higher costs and lower ore grades at its massive Grasberg mine in Indonesia impacted results. Expansions were also seen at Chile's Collahuasi, whose shareholders are Xstrata, Anglo American and a Japanese consortium. The world's No 3 copper mine plans to spend $470 million on a 10 year exploration plan near its Rosario open pit operation in an effort to overtake Escondida, also in Chile, as the world's biggest copper mine. Escondida is owned mostly by BHP Billiton.