“It is very important for Chilean companies to participate in Asia Copper Week, as it is a good opportunity to interact with their Chinese customers”

Patrick Cussen, former Chairman of Cesco’s  Board:

“It is very important for Chilean companies to participate in Asia Copper Week, as it is a good opportunity to interact with their Chinese customers”

About 50% of Chile’s copper sales are made to Chinese companies. The Asian country plays a fundamental role for the development of local mining, therefore, instances such as Asia Copper Week, open an important relationship for business between the two countries.

With extensive experience in Chilean mining as Vice President of Sales at Codelco and Minera Mantos Blancos, the former Chairman of the Board of Cesco and current President of Celta Consultores, Patrick Cussen, recently traveled to the celebration of Jiangxi Copper’s 40 years, China’s largest smelter and refinery, which produces more than 1,400,000 tons of copper per year.

In the instance, he learned the impressions of the smelter industry in a context of low prices and a trade war that affects the world in general, and Chile in particular.

How are Chinese smelters dealing with the current shortage of concentrate and how is the situation glimpsed over the next year?

Chinese smelters are actually those that have caused the shortage of concentrate that exists at this time. There has been a strong increase in capacity for many years, which they know very well, and therefore it should not surprise anyone that there is a shortage, except for Chinese smelters. They will know how to overcome this situation. For the next year, there will be more shortage than we had before. Therefore, the treatment and smelting charges will surely go down, reflecting this shortage of concentrate.

As a good connoisseur of the Chinese mining industry, what are the main concerns of these companies in the medium term?

The Chinese mining industry provides less than 20% of the total copper requirements in China. Therefore, the main concern of the Chinese copper industry, especially foundries and refineries, is the future supply of metal, both in the form of concentrate and cathodes.

Why any Chinese investment has not been able to materialize it in the mining sector in Chile, besides Tianqui’s participation in SQM?

With no doubt, it is curious that there are no Chinese investments in the copper industry in Chile. But there are in Peru, where there are several Chinese investments and they have developed important mines such as Toromocho and Las Bambas. The truth is that I have never found an explanation that totally convinces me of this. I think that in the future there will be Chinese investments in Chile, and there will be circumstances that have not occurred yet. In any case, the best explanation that I have had to see is that in Chile the entire copper industry and the possibilities of developing mines have been very good for large international mining companies, such as BHP, AngloAmerican, Freeport, etc., So, these companies have carried out most of the projects.

How the trade war between the United States and China is affecting the Chilean copper industry?

The trade war between the United States and China has sharpened a process that was already happening in China, which is the decline in the growth rate of that country. Hence that has caused an impact on the demand for copper, which has been lower than expected. It is supposed that this impact will continue to lower, so the market reacts negatively, and we have seen the low prices of the last time. And of course, these low prices have affected the copper industry, because we already know that a low price, in addition to generating different problems in mining companies, always gives a little incentive to carry out the necessary investments so that copper production continues to grow.

China and Chile meet

The 8th version of Asia Copper Week will take place on November 18 in Shanghai, China. What do you think will be the main topics of the week?

An issue that is always present during this event is the situation of the copper market, particularly  the situation of copper cathodes and copper concentrates. This is the time of the year when many contracts are closed, the participants in this event have several conversations and negotiations in this regard, so it is a very good place to take the temperature of the market. On the other hand, this year there are certain issues that have become increasingly important, such as innovation and sustainability. 

Why do you consider it is important for the Chilean industry to participate in these types of meetings?

It is very important for Chilean companies to participate in Asia Copper Week, as it is a good opportunity during the year to join their customers. In addition, Chilean companies that sell to China will normally negotiate with China during that time of the year. That is another good reason to be there.

What are the main opportunities and challenges that currently exist for the copper mining industry globally, and what is the main role of China and Chile in this scenario?

In my opinion, the main opportunities in the copper industry are in the areas of ​​innovation and  ​​sustainability. It is essential to find solutions and advances in these two areas. Both Chile and China, as the main producer and main consumer of copper respectively in the world, are precisely the actors that should be more concerned and even coordinated in finding solutions to these issues.

And there is a huge challenge because there are problems in the communication between mining industry with the rest of the country, and it is not understood how important the industry is and the need of a solid mining for all Chileans, and of course there are concerns about the environment, communities and everything that surrounds it. It is an important challenge, and the mining industry must also worry that everyone around it, politicians, the press, government, the country in general, appreciate what mining contributes to.