Rising copper production globally this year should offset the tightness in the market and its susceptibility to supply disruptions, according to UK-Australia resources firm Rio Tinto.
Although copper has not experienced a price rally to the same extent as other base metals in recent months, its price of $4.69/lb at the end of March was 7pc higher on the quarter, reflecting near 16-year lows in exchange stocks, Rio Tinto said.
The firm produced 125,000t of mined copper in January-March, 4pc higher on the quarter but 5pc lower on the year. Mined copper guidance is 500,000-575,000t for this year compared with actual output of 494,000t in 2021. Cash production costs are expected to be $1.30-$1.50/lb for this year.
Rio Tinto's share of production from the Escondida copper mine in Chile totalled 68,200t in the first quarter, 5pc lower on the year because of continuing Covid-19 measures, social unrest and plant maintenance. Output at its wholly-owned Kennecott mine in the US totalled 47,000t, up by 42pc on the year, mainly because of higher grades. But the firm's 10,200t share of production from the Oyu Tolgoi mine in Mongolia was 33pc lower on the year because of lower grades and mine sequencing.
Refined copper production of 40,200t at Kennecott in January-March was 11pc lower on the year but 58pc higher on the quarter. Escondida produced 14,400t in the quarter, 3pc higher on the year but 1pc lower on the quarter. Overall refined copper guidance is 230,000-290,000t for this year compared with actual output of 202,000t in 2021.
The firm said it has reached a comprehensive agreement with the government of Mongolia for work to proceed on Oyu Tolgoi's underground mine operations. Construction was impacted by reduced workforce availability because of Covid-19 cases in the first quarter, adding to project costs and delaying completion. First sustainable production from the underground operations is expected in the first half of 2023.
At the Resolution copper project in the US state of Arizona, work is continuing on the republication of a final environmental impact assessment, community engagement and mine studies. Resolution is one of the world's largest undeveloped copper projects and has the potential to become North America's biggest copper producer over a 40-year mine life. It is 55pc owned by Rio Tinto and 45pc owned by Australian resources firm BHP.
