The Chilean state-owned mining company Codelco is planning to end long-term contracts to sell copper concentrate to Chinese clients starting from 2025, according to multiple sources familiar with the matter.
According to Reuters, the sources said that Codelco is hoping to replace exclusively copper concentrate deals with other agreements that include concentrate and value-added intermediate products, including blister and anode, which are derived from concentrate and can be turned into cathodes or copper metal.
The sources claimed that some Chinese customers have protested the changes but are willing to accept new contracts that include intermediates because they will need Codelco’s concentrates in case of any future deficits.
They added that Codelco wants to change its agreements and sales strategies due to uncertainty regarding the company’s ability to meet contractual obligations.
"Some measures adopted are due to the normal management of Codelco's commercial product portfolio and not to availability adjustments and/or lower production," Codelco said in response to a request for a comment for Reuters. "Codelco continually updates its contracts according to the prevailing dynamics in the market."
During 2022, the miner saw its production rates drop to 1.46 million metric tons, the lowest output seen in 25 years. Production levels are once again expected to decrease in 2023 to between 1.31 million and 1.35 million metric tons of copper.
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