Shanghai 19/11/2015 - Codelco will increase its sales of blended copper concentrates in 2016 before dramatically reducing shipments in 2017 and exiting that business all together in following years, Roberto Ecclefield, vice-president of non-refined copper sales at the Chilean company said on Thursday.
"Codelco is not planning to do this blending for ever, we are going to solve the complexity problem of concentrates through technological solutions," he said at Metal Bulletin's conference during Asia Copper Week (ACW).
"From 2017 onwards we will pull out of the business and probably not be in that market afterwards," he added.
Codelco should increase blending concentrates sales further in 2016 to close to 500,000 tonnes including own production and purchased material, compared with nearly 450,000 tonnes expected in 2015 and slightly more than 300,000 tonnes in 2014, but sales should then fall back below 300,000 tonnes in 2017, he said.
"We have mainly sold blending material to China but we are going to start delivering in Japan and possibly India," Ecclefield said.
Codelco experienced rapid growth in its complex concentrates production, especially high-arsenic material, following the start of its Ministro Hales mine in 2013.
This, together with increased high-arsenic concentrates production from new mine Toromocho, existing mine Chuquicamata and some Caucasian operations, sparked an unexpected rise of 700 percent in the availability of complex material in the global market in less than two years. Supply of complex concentrates increased from 200,000-300,000 tonnes in 2013 to 1.2-1.4 million tonnes in 2015, Ecclefield said.
Blending capacities worldwide also risen - by 83 percent in five years, mainly driven by growth in Europe and Taiwan - but have not been sufficient to treat the increased supply of high-arsenic concentrates, causing the complex market to move into a surplus in 2014 for the first time, he noted.
Codelco increased its portfolio of concentrate products and brands by 20 percent this year after entering the blending business and producing a new type of product called calcine, which is a roasted concentrate that is very high in copper content with only 0.25 percent of arsenic.
Concentrates with arsenic content above 0.5 percent cannot be imported into China, the world's largest buyer of concentrates and Codelco's biggest customer. Ministro Hales produces concentrates with four-percent arsenic, but a new roaster at the mine allows to treat the material and produce calcines, which can then be processed by most smelters.
The roaster has been ramping up since reaching stable operating rates in May and is now running at full capacity of 550,000 tonnes of treated concentrates, producing up to 480,000 tonnes of calcines.
Codelco's concentrates sales increased to 441,814 tonnes in the first nine months of 2015 compared with 429,130 tonnes for the whole of 2014. Some 13 percent of shipments were Codelco's own blended material and another 13 percent were purchased material, while two percent were in the form of calcines.
Codelco has started to deliver calcines directly to smelters for processing rather than treating it internally at Chuquicamata and hopes to sell more of it next year. This meant that more Chuquicamata concentrate with 1.2 percent of arsenic has been available in the market for sales outside China, but these could eventually be treated at the roaster in the future, Ecclefield said.
"The roaster has only been operational for six months - it is too early to say if this is the solution to treat all high-arsenic concentrates in the future," he said.