Chile copper giant Codelco eyes India market to curb China reliance
Workers at the Comahue copper mine in Antofagasta, Chile. (Photo by GLENN ARCOS/AFP via Getty Images)
CODELCO, the world’s largest copper producer from Chile, has aimed to quadruple sales in India and Southeast Asia in order to curb its strong reliance on China in matters of sales, Reuters cited the firm as saying in an exclusive report.
The state-run company will open a new office in Singapore next month to push around the region to deal with clients in countries like Vietnam, Malaysia and Thailand, among others, and to lead the drive into India, it informed.
The push by Codelco comes at a time when global copper prices have been elevated amid recovering demand worldwide and prediction that long-term shifts towards electric vehicles will propel the red metal’s demand in the future.
On April 30, the South American firm reported surpluses of $1,627 million in the first trimester of 2021, the highest in a decade, because of an increase in the production and a rise in copper price.
Speaking to Reuters, Codelco, which said in April that the surge in Covid cases will not impact its production of copper, conceded that the markets it is eyeing should see the highest growth in copper consumption over the next two decades.
‘India, Southeast Asia copper consumption to shoot by 2040’
“Southeast Asia and India today represent about 8% of refined copper consumption globally, and this percentage is expected to exceed 20% in 2040,” Carlos Alvarado, a vice president for the Chilean company said in a statement, according to Reuters.
China is the main buyer of copper from Chile and the top client for Codelco, which has a key office in the city of Shanghai.
But why is it anticipating greater market prospects in India and southeast Asia?
“An important factor in strengthening our relationship with Southeast Asia and India is the anticipation… that, in the short term, China will reduce its dependence on importing refined copper, because it will have a greater smelting capacity to produce it,” Alvadaro explained.
“In addition, we will mitigate the risks of lower growth in the Asian giant.”
Coldelco currently sells in India concentrates of copper, blister and molybdenum but it said that in order to enter the copper cathode market, talks were expected to take place towards bilateral agreements to eliminate copper tariffs by up to five per cent.
Coldelco’s commercial strategy was, besides reducing dependence on China, to strengthen its leadership in copper supply to the United States, set up long-term alliances with end customers in Europe and Asia and increase participation in the emerging markets of India and Southeast Asia.