The world lost a great mine this week: the Century zinc operation in Australia. Where the operator, China’s MMG, shipped the final loads of concentrates that the operation will ever produce.
But even as Century is dying off, MMG said it is bringing on another giant operation — in a different part of the world, with a completely different metal.
MMG said Wednesday that its Las Bambas copper mega-mine in Peru is coming on faster than expected. With the operation likely to exceed previous production forecasts this year.
By a lot. Related: Russian-OPEC Production Cut Remains A Long Shot
MMG announced that it now expects Las Bambas to produce between 250,000 and 300,000 tonnes of copper metal this year. Up 25% to 50% from the 200,000 tonnes of production the company had previously projected for the mine in 2016.
This means a lot more copper is hitting the market from this enormous operation — a lot sooner than expected. MMG in fact said it now sees Las Bambas being one of the top three copper mines in the world by output.
This supply is already being shipped — with the mine having sent its maiden shipment of copper concentrate earlier this month. And MMG said a second shipment of concentrate is expected to sail before the end of January. Related: Weak Economy Could Stifle Oil Price Rally
The company also shed some light on costs at Las Bambas. Saying that C1 production costs are expected to be $0.80 to $0.90 per pound of copper here.
That suggests Las Bambas will be well within the upper quartile of the global copper cost curve. Meaning this operation will be doing just fine in terms of profits at current prices of $2.05/lb.
All of which is another sign of significant new supply hitting the copper market over the coming months. Worth considering as we plan new projects and investments in this space.
Here’s to a giant awakening
By Dave Forest
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I'm betting against that optimism.