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Codelco sees demand growth in US copper mart

Keywords: Tags  copper, Codelco, Diego Hernandez, Chile, China

SANTIAGO, Chile — Corporación Nacional del Cobre de Chile (Codelco) has seen copper demand rise in North America this year, the Chilean miner’s chief executive officer, Diego Hernandez, said Monday.

"The (United) States is fighting hard to make manufacturing more competitive," Hernandez told reporters at a news conference at the start of CESCO Week in Santiago, Chile.

"Growth of 2.5 percent is perfectly achievable this year," Hernandez said of the North American market. "We are seeing that it’s happening already, even in an election year, when usually not too much happens."

Meanwhile, the copper major continues to watch China, whose ability to meet its growth target of 7.5 percent this year will be key to how markets develop, Hernandez said.

"If China grows by 7.5 percent, we believe the supply/demand (balance) will be quite tight again, close to 2011 (levels)," Hernandez said.

Codelco does not expect any new production to come on stream in 2012, he added.

If the company were to grow, increased production costs mean acquisition is a more attractive option than building new projects at present, Hernandez added, noting that Codelco is primarily focused on its legal battle with Anglo American Plc to acquire a 49-percent stake in Anglo American Sur (AAS) rather than looking for other companies to acquire.

"The 49 percent is what we want to acquire; that’s big enough to keep us satisfied," Hernandez said.

Codelco is suing Anglo in Chilean court after the London-based company sold a 24.5-percent stake in AAS to Japan’s Mitsubishi Corp. in November and blocked Codelco’s attempts to exercise a previously agreed-upon option to increase its stake in AAS.

"We expect a judgment on the first instance between the end of this year and mid-2013," Hernandez said.

Codelco is also seeking to obtain compensation from Anglo for losses it incurred by it not being able to increase its stake in AAS from January 2012 until the court reaches its final judgment.

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