A landslide at the worlds largest open pit copper mine does not hold good news for our industry.
- The event was expected. They evacuated the mine the night before based on sensor data, but they did not expect the landslide to be so large.
- Equipment lost in the landslide and ensuing local earthquake was valued in the tens of millions of dollars.
- No timeline for resuming operations.
- Short term economic effects will be localized, though declaring force majeur will cause some contracts to be uncovered in the metal markets
- Longterm economic effects will be larger than we can reasonably estimate- Insurance coverage for the lost property, for the counterparty rates on futures contracts will force costs to rise which will be built into the red metal prices going forward.
- Also planned expansion at the mine will be delayed.
We did not see a spike in copper prices today, but this event will be a long term determinant of higher prices for the red metal in the future.
Copper is so widely required in modern technology that this will be an imprtant event in the markets the precision machining industry serves.