Copper Mine Capacity to Grow 5.2% a Year, Study Group Says

By Glenys Sim

July 1 (Bloomberg) -- Global copper mine production capacity will expand 5.2 percent a year through 2012, the International Copper Study Group said.

By 2012, mines around the world will produce 23 million metric tons of copper, an increase of 17.9 million tons from last year, the Lisbon-based group said in an e-mailed statement late yesterday. South America and Africa will account for more than 40 percent of the capacity gain, it said.

Of the total increase, copper concentrate capacity is expected to increase 3.5 percent a year to 16.9 million tons in 2012, said the group.

The price of the metal has quadrupled in the past five years as mining companies struggled to keep up with increasing demand from China and other emerging economies. Copper for delivery in three months on the London Metal Exchange reached a record $8,880 a ton on April 17 and was trading up 0.4 percent at $8,540 a metric ton at 10:59 a.m. local time in Shanghai.

The group estimates world refining capacity will reach 25.6 million tons in 2012, up from 21.5 million tons in 2007, with China and Congo contributing about half of the rise. Smelter capacity will rise by an average 2.4 percent a year to 18.7 million tons by 2012.

``Primarily due to several project expansions and start-ups in China, the smelter growth rate during the first 3 years averages 3.1 percent a year and is projected to match the concentrate growth rate over the same period,'' it said. ``The situation will be reversed beginning in 2010 when significant new concentrate capacity comes on stream.

Total idled smelter capacity is about 180,000 tons a year and refineries being maintained have a combined capacity of about 390,000 tons, according to ICSG data.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net