Corporate News: Chilean Copper Mines Face Cost Pressures
Chile used to be the center of copper mining. Global mining companies used to venture into the rich copper deposits high in the mountains of Chile. However as costs have rose, many companies are starting to consider new investments in places such as North America. Since Chile became the world’s largest copper-producing nation, Codelco emerged. Codelco is the Chilean state owned copper mining company. Some of the variable costs that increased in Chile are electricity and the desalination of seawater. Another huge increase in total production costs is the rise in labor while a decrease in productivity.
For all the reasons combined, many global mining companies are looking for projects in North America. The United States have comparably less wages depending on the positions, higher productivity, a lot cheaper electricity, and plenty of freshwater. The only downside to moving copper mines to the U.S. is the environmental and regulatory permitting needed. Nomura Securities analyst Patrick Jones said “It can take as many as ten years to bring a mine into production in the U.S. due to rigorous regulatory permitting process.”