Copper Market Sees Shifts in Chile and Abroad

Strategic Insights -

Labor issues in Chile's copper mining sector resolved, pushing copper futures to six-month low, while global aluminum output and Russian nickel production also experienced changes in November and January-November respectively. Meanwhile, new discoveries were made in Australian copper and zinc-lead deposits, while a provincial bill to suspend open pit mining in Argentina's Mendoza Province was vetoed.

The resolution of labor issues in Chile's copper mining sector has led to a significant shift in the global copper market. Copper futures on the Comex exchange in New York plunged to a six-month low, while the London Metal Exchange copper also sagged to a six-month low. The labor issues were resolved when workers at Xstrata PLC's Altonorte copper smelter in Chile accepted a sweetened contract offer, and two unions negotiating contracts with state copper giant Corporacion Nacional del Cobre de Chile's Norte division voted in favor of accepting the company's final offer.

Key Takeaways:

  • Copper futures on the Comex exchange in New York plummeted to a six-month low due to the resolution of labor issues in Chile.
  • The London Metal Exchange copper also sagged to a six-month low as a result of the labor issues being resolved.
  • Workers at Xstrata PLC's Altonorte copper smelter in Chile accepted a sweetened contract offer.
  • Two unions negotiating contracts with state copper giant Corporacion Nacional del Cobre de Chile's Norte division voted in favor of accepting the company's final offer.
  • Global aluminum output in November 2006 fell by 60,000 metric tons to 1.979 million tons.
  • Russian nickel production in January-November rose 5.6% on the year.
  • Terramin Australia Ltd. discovered a new zone of zinc-lead mineralization at its Menninnie joint venture with Zinifex Ltd. in South Australia.
  • A provincial House bill that would have suspended all open pit mining in Argentina's Mendoza Province was vetoed by Governor Julio Cobos.

Statistics:

  • Copper futures on the Comex exchange in New York settled below $3 per pound for the first time in six months.
  • London Metal Exchange copper fell to a six-month low.
  • Global aluminum output in November 2006 was 1.979 million tons.
  • Russian nickel production in January-November rose 5.6% on the year.
  • Terramin Australia Ltd. discovered a new zone of zinc-lead mineralization at its Menninnie joint venture with Zinifex Ltd.

Sources:

  • "Workers at Calama No. 1 union accept contract offer: union leader" Dow Jones Commodities News via Comtex, Santiago, Dec 20, 2006
  • "Kagara Zinc Ltd. starts production at Thalanga copper treatment facility" Dow Jones, Melbourne, Dec 21, 2006
  • "Xstrata's Altonorte smelter strike ends with sweetened contract offer" El Mercurio, Santiago, Dec 20, 2006
  • "Corporacion Nacional del Cobre de Chile's Norte division unions accept final offer" Dow Jones, Santiago, Dec 19, 2006
  • "Total world aluminum output in November 2006 falls 2.8%" International Aluminum Institute, London, Dec 20, 2006
  • "Nickel production in Russia rises 5.6% in January-November" Federal State Statistics Service, Moscow, Dec 20, 2006
  • "Terramin Australia Ltd. discovers new zinc-lead mineralization at Menninnie project" Dow Jones, Melbourne, Dec 20, 2006
  • "Mendoza Province House bill to suspend open pit mining vetoed" Los Andes, Buenos Aires, Dec 19, 2006
  • "Comex copper futures plunge below $3 per pound" Dow Jones, New York, Dec 20, 2006
  • "London Metal Exchange copper falls to six-month low" Dow Jones, London, Dec 20, 2006
  • "Copper futures on Shanghai Futures Exchange settle slightly lower" Dow Jones, Shanghai, Dec 20, 2006