New copper production has been hitting the market fast and regular of late.
And this week we got news that yet another massive mining project is now providing additional supply — even as prices dip to their lowest in six years.
That’s the Las Bambas copper mine in Peru. A mega-project being developed by China’s MMG — which said yesterday the mine has just sent out its first shipment of copper concentrate. Related: Oil Sold for -$0.50 per Barrel. A Negative Price!
MMG announced that 10,000 tonnes of concentrate from Las Bambas sailed out of Peru’s Port of Matarani last Friday. Marking the first production ever from this new mine.
And there’s a lot more where that came from.
Las Bambas is in fact one of the largest copper mines to be developed globally the last several years. With the operation expected to produce 200,000 tonnes of copper metal this year — ramping up to 400,000 tonnes in 2017. Related: U.S. Crude Production Could Fall Harder Than Thought In 2016
This is one of the major operations expected to lift Peru’s copper output by 65 percent this year. This following a 35 percent rise posted this past October.
Of course, given the ownership by MMG, much of the Las Bambas output will likely be destined for China. Meaning other copper producers around the world may still be left looking for supply.
But given that China has been one of the major drivers for global copper demand, the emergence of a big supply source like this is a critical happening for the industry. Related: The World Just Lost One Of Its Biggest Oil Plays To Low Prices
Added to other major China-backed developments like the Toromocho mine in Peru and the upcoming Mirador development in Ecuador, mines like Las Bambas are going to mean Chinese buyers have a steady stream of mine feed. Which may dampen China’s buying from other parts of the world.
Watch to see if the continued ramp-up of Las Bambas goes on schedule. And if China’s buying elsewhere globally is less aggressive in the wake of this commissioning.
Here’s to a big shoe dropping
By Dave Forest
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