Codelco

The contraction is centred on the country's premier assets.

State-owned Codelco and BHP's Escondida and Spence mining operations account for more than three quarters of the net production drop.

declining ore grades, persistent maintenance delays and unforeseen operational disruptions have restricted throughput.

To meet even these lowered targets, Chilean operations must expand output by 8% per month through the fourth quarter compared to their year-to-date run rate.

So what happens in Japan does echo throughout the world.

We've got an interesting story about Codelco.

That's a Chilean copper miner.

And apparently they have been over-inflating their copper production estimates significantly over the last few years.

Free of charge.

BetMGM operates pursuant to an operating agreement with iGaming Ontario.

Then we've got Codelco dismisses eight staff as copper output scandal widens.

This is pretty interesting here.

So in other words, the price on the LME or in Europe is going to have to compensate for the shipping price.

Continuing on, Codelco sets 2027 Europe copper premium at record $350 a metric ton, sources say.

This is Reuters on October 20th, last week, via mining.com. Chile's Codelco is offering its European customers copper at a record-high premium of $350 a metric ton for next year, up more than 7% from $325 this year, two sources with knowledge of the matter said.

Codelco, the world's biggest copper miner by production, declined to comment.

Premiums set by Codelco for physical delivery of refined copper are paid on top of London Metal Exchange prices and are often referenced as a benchmark in global supply contracts for the metal used in electric vehicles, grid infrastructure, and construction.

The record premium offered as the global metals industry gathers in London for LME week points to an emerging trend of higher copper premiums for next year due to expectations of shortages in Europe.

Oribus, Europe's biggest copper smelter, last week hiked its 2027 premium by around 10% to $347 a ton, also a record for the German company.

Shortages in the world outside the United States are due to expectations of U.S. tariffs on copper imports.

The other thing is, it's a big time, certainly for European participants, where they lock in long term units and normally have an idea about how much they're going to lock in and at what level.

Now, we have an idea of the level because Arubis and Codelco, and we'll circle back to that in a sec, have offered their premiums.

But my understanding from a lot of people I've spoken to is everyone wants to wait until the final hour before deciding how much to allocate to next year, because this year premiums have been under pressure in Europe and without a tariff pull.

It becomes really hard to justify such high premiums.

That was actually agreed in Shanghai.

um on the on the final day or the saturday like i think literally the saturday morning or the friday evening or something that was what that was when that happened other than that it's been prolonged and protracted discussions um i did ask a number of copper cathode participants in europe because they've said look it's wait and see now it's basically long how how long can you wait and see um And they said, to be fair, most people can wait until at least December.

The fear of acute tightness, if the offers are out, Rubis have put out their offer, Codelco have put out their offer, European customers are important to those companies.

If the offers are there... those consumers, those traders probably have the potential to wait.

And obviously, demand is very high because of this kind of AI driven demand for more electricity, which requires a lot of copper.

Yeah, there was an interesting story on Codelco in Chile from Bloomberg that is having trouble, that their mines are coming, not that they have expired or coming to an end, but they're not finding as much copper as they did before.

I know Grupo Mayu has some copper mines down there too, but the numbers reflect how well they're doing.

And on my side, Damian, just a slight quick note on traffic and costs in Mexico before we move to our interview.

We begin in the physical metals markets where annual contract negotiations during London Metal Exchange Week are exposing a severe geographic dislocation in refined copper supply.

Chile's state-owned producer Codelco has formally offered European customers a record physical premium of $350 per metric tonne for delivery next year.

That represents an increase of more than 7% over this year's levels, matching an aggressive move by Orubis, Europe's largest copper smelter, which lifted its own delivery premium to $348 per metric tonne.

These unprecedented terms reflect an acute tightening of physical cathode availability across Europe.

For over 18 months, physical copper has been aggressively pulled into United States warehouses ahead of anticipated import tariffs, leaving international depots severely depleted.

Warehouses affiliated with the COMEX in the United States now hold approximately 70% of visible global copper inventories, driving COMEX copper prices to an all-time peak near $7 per pound or more than $15,000 per metric ton.

With mining supply further curtailed by operational disruptions, including a fatal landslide at Codelco's flagship El Teniente deposit, analysts at Goldman Sachs have raised their copper price forecasts to $14,700 per metric tonne by year end and $15,400 for next year.

The bank projects a copper deficit outside the United States of nearly 1 million metric tons this year, driven by fierce competition between Chinese fabricators facing acute domestic scrap shortages and United States buyers building protective tariff buffers.

Um, some traders will be hungry for units.

Um, I would say also importantly, last year's discussions from my understanding, um, so this is, you know, one of the big things that will happen at LME is Aurubis, Codelco and Boliden and, uh, Atlantic Copper and all the big European producers will go to their customers and, and, and talk contracts and KJHM as well, and, um, Montanwerk Brixlegg will, will go to their European customers and say, "Look, how much tonnage do you want? These are the premiums that we, we've heard, and this is the sort of level we'd, we'd like to agree with you." Often those conversations, certainly when premiums increase like they did last year, are very challenging.

You go and say, "Premiums are really high.

Would you like some copper?" And people kind of go, "Ooh, that's a bit high." But actually last year, despite a large increase in premiums, the broad feedback I got from everyone was that people wanted to secure units.

Um, so premiums are high.

I think they'll be accepted.

What will be interesting is to see what Codelco offer and also what's offered to participants in, in, in East Asia, because Chinese participants are less accepting of really high premiums.

They were very unaccepting of the high premiums last year.