January 2023
The copper price started 2022 at around US$9,700/t, increasing slowly over the first three months, with the monthly average AME Europe copper prices increasing to US$10,272/t in March.

In early 2022, manufacturing activity in the most Asian countries, the Eurozone and the US remained in expansion territory as global supply chain bottlenecks eased, and the impact of the Omicron wave of Covid-19 diminished.

In early March, copper prices briefly touched record highs amid fears that sanctions imposed on Russia, after the escalated Russia-Ukraine conflict, could further tighten already-tight supply.

Copper prices started to retreat from April as near-term demand cooled on slowing Chinese growth and rising interest rates. China’s zero-Covid strategy, coupled with an ongoing crisis in its crucial property sector, weighed on its economic growth.

In the rest of the world, more-aggressively-than-expected tightening monetary policy in response to curb soaring inflation triggered fears of economic recession. The ongoing Russia-Ukraine war also slowed growth. Copper prices lost more than US$2,000/t by the end of June.



After touching 20-month lows in mid-July, copper prices stopped the downward trend, as supply disruptions in major copper-producing countries, including Chile and Peru, provided some support. Meanwhile, rising EV production and infrastructure investment, particularly within the deployment of renewable energy systems, lifted copper demand, and partially offset the lost in traditional sectors, such as construction, However, prices were unable to return to the levels seen earlier in the year.

After stablised at around US$7,600/t in September and October, copper prices began to increase in November, on the back of growth in the demand outlook as China started to pivot away from its costly zero-Covid policy.



US-based miner Freeport-McMoRan and major Chinese copper smelters have agreed on treatment and refining charges (TC/RCs) of US$88/t and US¢8.8/lb for copper concentrate supply in 2023. The settlement is the highest since 2017 and 35.4% higher than the 2022 benchmark of US$65/t and US¢6.5/lb. The increase in TC/RCs is driven by an expected oversupply of copper concentrate in 2023.

AME forecasts that the copper concentrate market will be in surplus of 412kt in 2023, with supply growth at 7.6% to 19,538kt, outstripping demand growth at 1.8% to 19,125kt. The supply growth is driven by new capacity ramping up. Meanwhile, primary smelter concentrate consumption will largely remain stable.




During the first eleven months, China’s imports of unwrought copper and copper products, increased 8.5% year on year to 5.36Mt. The import volumes of copper concentrate, or partially processed copper ore were 23.17Mt, up 8.6% year on year. The increase in imports was mainly due to demand expected to rise as local governments ramped up infrastructure spending to offset a slowdown caused by its zero-Covid policy and property woes. Lowered stocks, weakness in prices in the second half and opened arbitrage windows also encouraged imports. 

Notably, more copper from Russia has flowed into China as some buyers have turned to Russian supplies which are available at a discount to other origin regions. Chile's state-owned Codelco, the world's biggest copper miner, has made an offer to sell copper to Chinese clients at a premium of US$140/t in 2023, a rise of 33.3% from US$105/t in 2022. China's buyers have said they might further raise their purchases of Russian materials.

Codelco and Aurubis have also increased 2023 European copper premiums by 85% to US$235/t and US$228/t, respectively, reflecting European market’s lower acceptance of Russian copper, putting copper from other regions in higher demand. More Russian copper is expected to find its way to China.


Mine Curtailments

In Peru, several mines were suspended due to community protests. MMG’s Las Bambas mine had been blocked for over 500 days since the commencement of concentrate transport in 2016. The most recent protest began in November and forced the mine to reduce operations to 30% of its usual capacity.

In April, after residents of the Fuerabamba community entered the mine and set up camp inside it, the mine suspended operations for over 50 days until June, the longest in the mine’s history. The Las Bambas mine has halted construction of its new Chalcobamba pit, originally scheduled to start production in 2022.

Southern Copper’s Cuajone mine was also stopped for nearly two months until April as a result of another protest. Local communities cut the company's water access and blocked a key railroad after the company decided to replace a 50-year-old water pipe that supplies nearby communities.

Glencore’s Antapaccay mine also encountered protests from local communities. They are also opposing the Coroccohuayco project at the Antapaccay mine. In response to the protest, Glencore said that it does not plan to execute the US$590m Coroccohuayco project in the next two years.

In Chile, copper producers were also impacted by social unrest, incidents, and other operational challenges such as facility issues, declining copper grades, Covid-related absenteeism and the water crisis.

Chile’s state-owned Codelco, the world’s largest copper producer, cut its 2022 copper production guidance to 1.46t – 1.435Mt, down from a previous forecast of 1.61Mt. Codelco was forced to implement a redesign at its Ministro Hales Division after a landslide at the end of last year, which lowered recovery levels at the site. Geomechanical reasons and material handling system issues affected the Chuquicamata underground mine, resulting in lower grades.

Additionally, Codelco’s flagship El Teniente Division had less treatment due to the freezing of a reservoir, while infrastructure conditions also led to lower recovery and treatment at the Andina mine.

At the Chuqui Subterránea project, an expansion of Chuquicamata, the company had a fatal accident in July, which followed the death of another operator at the Rajo Inca project, an expansion of the Salvador mine. In early August, the miner had a structural accident at Chuquicamata, where the top of a material dome and a conveyor belt gave way.

Antofagasta shut down an underground pipeline at is Los Pelambres mine after a leak was detected in late May. In mid-September, severe sea swells overturned a construction platform working on the marine works of the Los Pelambres desalination plant.

Antofagasta now expects its 2022 full-year copper production at the bottom end of the revised production guidance of 640-660kt. Approximately 30kt of expected copper production in 2023 will be impacted due to the desalination plant delays.


Smelter and Refinery Curtailments

After an environmental incident in June in which dozens of people showed signs of poisoning from sulphur dioxide emissions, Codelco decided to permanently close its Ventanas smelter due to outdated technology that made emissions reduction difficult. The Ventanas refinery remains open.

Codelco’s Chuquicamata smelter and refinery also experienced operational difficulties. Its operations have been suspended for an extended overhaul. The maintenance-related stoppage was initially planned for 90 days but has now been extended to 135 days.

In China, power rationing orders in the June quarter impacted some smelters’ production, such as Daye (-12kt), Fuye (-8kt), Zhangjiagang Lianhe (-4kt) and Tongling (-12kt). China’s operations were also disrupted by Covid lockdowns. Guixi county, where the world's largest smelter is, experienced a short-term lockdown in August, which is estimated to reduce the Guixi smelter's output by 4kt.


New Mines and Expansions

Several new mines and expansion projects started production during 2022. The biggest new capacity in 2022 was Ivanhoe Mines and Zijin Mining’s Kamoa-Kakula mine in the DRC. The mine launched the 3.8Mtpa Phase Two concentrator in March, four months ahead of schedule.

Kamoa-Kakula is currently undergoing a debottlenecking programme, which will increase the combined processing capacity of the Phase One and Two concentrator plants from 7.6Mtpa to approximately 9.2Mtpa. Once completed in the June quarter of 2023, the rate of copper production is projected to reach approximately 450ktpa, positioning Kamoa-Kakula as the world’s fourth largest copper producer.

Kamoa-Kakula will be further expanded in a third phase. Processing capacity at Kamoa-Kakula will be lifted to greater than 14Mtpa. The Phase Three concentrator is expected to commission in 2024 and increase copper capacity to 600ktpa. Phase Three also includes the construction of a direct-to-blister smelter with a production capacity of 500ktpa of blister copper.

In Peru, Anglo American’s 60%-owned Quellaveco open pit mine produced the first copper concentrate in July. Anglo expects the mine to reach design capacity in 12 months and produce 300ktpa of copper equivalent on average over its first 10 years. Quellaveco has an estimated 1.7Bt Ore Reserves at 0.53% copper and a 36-year Reserve Life. There is a potential for further expansion given its estimated additional Mineral Resources at 1.6Bt at 0.38% copper.


New Smelters and Expansions

New smelters and expansions scheduled for this year have been put into production. After several delays due to Covid-19 impacts, Daye Nonferrous’ 400ktpa Hongsheng smelter and refinery in China’s Hubei province started commissioning in November.

The new smelter is a primary smelting and refining project using a combination of Flash Smelting and Flash Converting (Double-Flash) technology. It is designed to process 1.6Mtpa of copper concentrate to produce 400ktpa of copper cathode and 1.5Mtpa of sulphuric acid.

In Guangdong province, Jiangxi Copper started trial production from the 100ktpa expansion project at its Qingyuan Copper secondary smelter and refinery in November, lifting Qingyuan Copper’s total capacity to 200ktpa. The expansion project started construction in January 2022 and was planned to be completed in twelve months at a budget of CNY253m (US$35m).

In Qinghai province, Western Mining also in November started production from the 50ktpa expansion project at its Qinghai Copper smelter and refinery, lifting Qinghai Copper’s total capacity to 150ktpa.


Mergers and Acquisitions

Moving toward a net-zero emission is spurring medium-to-long demand growth for copper. Producers have been acting in hopes of grabbing the market share.

BHP has clearly set its strategy to grow future facing commodities, including copper. It has made an improved offer to acquire all shares in OZ Minerals for a cash price of A$9.6bn (US$6.4bn). The OZ Board has noted it intends to recommend shareholders approve BHP’s new takeover offer. BHP is likely looking at potential synergies that could be derived from combinations of their assets in South Australia and Western Australia.

Harmony Gold has acquired the Eva copper project, located in the Australian state of Queensland, from Copper Mountain Mining Corporation, with a payment of the upfront US$170m. The acquisition marks the beginning of Harmony’s strategic diversification into copper, a critical metal for the global energy transition.

Rio Tinto has completed its US$3.3bn buyout of Turquoise Hill Resources. It is now the 66% owner of the Oyu Tolgoi copper-gold mine in Mongolia, with the remaining 34% owned by the government of Mongolia through Erdenes Oyu Tolgoi. Rio initially offered C$34 (US$25) a share in March this year but increased it to C$43 (US$32) per share in cash in August.

Glencore is offloading copper assets in Australia. It sold Ernest Henry to Evolution Mining in January 2022 for A$1bn (US729.60m). In March, Metals Acquisition Corp. entered into a definitive agreement with Glencore to acquire the CSA mine in New South Wales for US$1.1bn, plus a 1.5% copper net smelter royalty (NSR). In April, Comet Resources signed a binding agreement to acquire the Mt Margaret project in Queensland from Glencore.

AME believes Glencore’s move is not a lack of confidence in the copper outlook. Glencore took the opportunity when copper prices were at record highs to offload small size and short-life copper mines.

Other major M&A actions in 2022 included: Lundin Mining’s acquisition of Josemaria Resources for a total consideration of approximately C$630m (US$490m); Sandfire Resources’ US$1,865m acquisition of the Minas de Aguas Teñidas (MATSA) Mining Complex in Spain from Mubadala Investment Company and Trafigura; South32’s acquisition of a 45% interest in the Sierra Gorda copper mine in Chile from Sumitomo Metal Mining and Sumitomo Corporation for a US$1.4bn upfront cash payment, plus a contingent price-linked consideration of up to US$500m.