Global Cu supplies remain disrupted: Rio Tinto

Covid-19 related supply disruptions are continuing to affect around 4pc of global copper supplies in addition to normal industry disruptions, according to UK-Australian mining firm Rio Tinto.

The recent strength in copper prices, which have risen to above $6,700/t from just above $5,000/t in the past six months, can be largely attributed to firm Chinese copper cathode imports, Rio Tinto said in its July-September production update.

Its mined copper output of 129,600t for July-September was 2pc lower than during April-June and 18pc lower than in the previous third quarter because of lower grades at the Kennecott mine in the US, following pit sequencing to accommodate an extended smelter maintenance shutdown. Output of 395,400t for January-September was 10pc below the same period in 2019.

Production from the Escondida mine in Chile totalled 82,800t during July-September, 1pc lower than for April-June and 9pc lower than in the previous third quarter. Kennecott's output of 34,700t was 5pc below April-June and 40pc lower than in the previous third quarter. Output from the Oyu Tolgoi mine in Mongolia of 12,200t for July-September was 1pc below April-June and 28pc higher than during July-September 2019.

Production guidance for 2020 has been maintained at 475,000-530,000t compared with actual output of 577,000t in 2019. The copper C1 unit cost guidance has been maintained at $1.20-1.35/lb.

Refined copper output of 24,800t during July-September was 57pc lower than in the third quarter of 2019 because of the delayed restart of Kennecott's smelting facilities after the May-June shutdown. Smelting at Kennecott s expected to be fully operational by the end of October.

Escondida produced 14,400t of refined copper during July-September, 27pc below April-June and 14pc lower than the previous third quarter. Kennecott's refined output of 10,400t for July-September was up by 44pc on April-June but 74pc lower than in July-September 2019.

The refined guidance for 2020, which was lowered in August because of Kennecott's smelter shutdown, is 135,000-175,000t compared with actual output of 260,000t in 2019.

By Angus Macmillan