By Naoki Taguchi
SANTIAGO DE CHILE, Chile – Japanese firms are plowing more money into copper mine projects in Chile and Peru, key producers of copper, of late. Infrastructure projects in China and other emerging nations as well as the growing popularity of electric vehicles are pushing up the global demand for copper and the race for acquiring resource interests is heating up.
A project with a 1.3 billion-dollar (about 140 billion yen) price tag is underway at the Los Pelambres copper mine, located 240 km north of Santiago de Chile, the capital of Chile, to build more facilities for sorting copper ore. JX Nippon Mining and Metals, Marubeni Corporation and two other Japanese firms own mining interests there. The project will be completed in mid-2021.
In March, Sumitomo Metal Mining and Sumitomo Corporation acquired a 30% stake in the Quebrada Blanca copper mine, which is located in the northern Chile and is estimated to have one of the largest copper mine reserves in the world, from a Canadian resource firm.
In July 2018, Mitsubishi Corporation decided to invest about 230 billion yen in the Quellaveco copper mine, which is one of the world’s largest untapped copper deposits, with production slated to begin in 2022.
Around 2015, Japanese firms were badly hit by falling copper prices and incurred massive losses. Despite this bitter experience, they resumed investing in large projects as they forecast copper supplies would run short in the mid- to long-term and wanted to “stabilize the procurement of iron ore,” said a person with the public affairs section in JX Nippon Mining and Metals. Japan imports all of its iron ore.
Allying with Japanese firms also benefits resource nations in South America.
“Deepening economic ties with Japan is essential to developing our economy and industry,” said a Chilean economist. “Japanese firms do business from a long-term perspective, so this is of benefit to many parts of the world.”
But China is the key player in the global copper market as it accounts for half of global consumption of the metal.
Chile’s Minister of Mining, Baldo Prokurika noted in an interview with Yomiuri Shimbun that while Chile welcomes China’s growing copper demand, “We can’t solely depend on (China) as we are a small nation.” He emphasized that “it will become important to broaden our markets” to deal with China’s possible economic slowdown due to the U.S.-China trade conflict. (Abridged)