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Global copper mine production is set to expand by 7.8% year-on-year this year as a result of multiple new projects coming online and the low base effects owing to Covid lockdowns having cut output in 2020, Fitch Solutions Country Risk and Industry Research says. Its ‘Outlook for Global Copper’ report states that output is slated to be strong over the next few years as a number of new projects and expansions come online, supported by rising copper prices and demand. Fitch Solutions forecasts global copper mine production to increase by an average 3.7% a year from this year to 2030, with yearly output forecast to increase from 20.2-million tonnes in 2020 to 29.4-million tonnes by the end of the decade. In Chile, Fitch Solutions’ growth forecasts are primarily underpinned by the start-up of BHP’s Spence Growth Option project. Fitch Solutions has revised its 2022 and 2023 forecasts for the country’s output upwards to 4.7% and 4%, respectively, from 4% and 3.2% previously.
In the longer term, a decline in average ore grades across the sector in Chile presents a key downside risk to its production forecast. Meanwhile, Fitch Solutions forecasts China's copper mine production to increase at an average of 1.3% a year over 2021 to 2030, compared with an average growth of 6.9% over the prior ten-year period. This slowdown in production growth will be driven by the closure of low-grade copper mines in the country and delayed planned capacity expansions, it says. However, growth in domestic production will still be positive as new projects come online. Fitch Solutions is maintaining its outlook for copper mine production to bounce back strongly this year in Peru, growing by 20% year-on-year, as a result of strong low-base effects and new projects coming online. However, it notes downside risks as elevated levels of unrest resulting from increased political risk may have an indirect impact on mining operations and supply chains.
Fitch Solutions has also maintained its forecast for copper mine production in the US to grow by 10% this year as the ramp-up of a few new projects supports growth. Over the medium to long term, a bullish view on copper prices will incentivise firms with the country’s well supplied project pipeline to push forward with project development, says Fitch Solutions. It further expects the Democratic Republic of Congo’s copper mining sector to see relatively strong growth this year. It forecasts production to grow by 6.9% year-on-year this year.