(Updates with more executive comment)
SANTIAGO, April 9 (Reuters) - Top copper mining executives have flocked to Santiago, Chile to discuss the state of the industry as concerns about oversupply and a credit crisis in China, the world’s No. 1 industrial metal user, weigh on prices and sentiment.
The following are some of their comments at the Cesco/CRU event:
On mining challenges in Chile:
”Chile has lost ground in terms of competitiveness. We need to tackle these challenges to efficiently recover our ranking.
Here’s a list of challenges we need to take on: The portfolio of mining projects needs certainty in terms of mining permits; legal gaps need to be filled; decisions need to be made about (funding) Codelco’s big projects.
In terms of competition, we need to guarantee the availability of water and energy at competitive prices. It’s a big list of challenges that we need to take on together. That’s our big challenge.”
On Chinese growth:
“We think the Chinese economy is fairly solid, it may have some problems, but they’re minor. We don’t see any reason for there to be a big crisis in China.”
On Chinese demand and copper prices:
”There’s some uncertainty. We certainly believe that’s short-term. The fundamentals for copper are there. The growth in China has been a bit bumpy, but again we believe this is short-term.
We firmly believe in the long term for copper. Short-term, we believe (the price) is going to stay in the current ranges it’s currently trading in. We see slight surpluses but nothing that will totally disrupt the market.”
On company guidance of full-year output of 700,000-720,000 tonnes:
”For the first three months () we’ve really had good results, both from Los Bronces and Collahuasi, but there are some headwinds we are still fighting.
The high grade we’re getting now will be offset by lower grade (later). We still have at Collahuasi these lower grades towards the end of the year, but we will guide the market in the next three months.
If Collahuasi comes totally out of its stabilization phase we could be changing that outlook but we’re not comfortable to do that at the moment. We’re also approaching winter 700 to 720 (thousand tonnes) is still our guidance.”
On ring trading:
”We are doing a full review of the ring in consultation with all the players just to validate that that is the reference price that people want to trade against.
(Ring trading) is about as transparent as you can get. So although regulations have not been designed around the market, it does check a lot of the boxes, which is not to say we should keep it the way it is, because at the end of the day it is important that it meets the requirements of everybody.”
RIO TINTO CHIEF EXECUTIVE OFFICER OF COPPER JEAN-SEBASTIEN JACQUES
On the decision on Monday to give away its stake in Northern Dynasty Minerals Ltd, owner of Alaska’s huge Pebble deposit:
“We looked at all options and concluded that although we remain absolutely committed to Alaska, although we acknowledged there is value in these deposits it does not fit with Rio Tinto’s strategy today.”
On ramp up at Ministro Hales mine, one of copper powerhouse Chile’s few new deposits in recent years:
”Ramp up is in full swing. The concentrator is virtually producing at design capacity. We think that if everything continues to go well the entire process can reach design capacity towards the end of this quarter.
The roaster of course has had some of the issues inherent to a ramp-up, but these are absolutely normal and to be expected.”
On 2014 output forecast:
”We (promised) production levels somewhat higher to those clocked in 2013 and we’re on a good track to meet that goal.
We’re projecting more production than last year, including if we exclude operations where we have a minority stake.” (Compiled by Josephine Mason in New York; Reporting by Alexandra Ulmer and Susan Thomas; Editing by Jonathan Oatis and Sofina Mirza-Reid)