Peru president seeks copper cartel to boost prices


LIMA, Peru (AP) - Peru and Chile, two of the world's top three copper producers, should work together to boost sagging metal prices as the world economic crisis slashes demand for copper, Peru's president said Sunday.

"When two close brother countries that produce copper compete, prices decline and both of them earn less," President Alan Garcia told reporters in Lima.

"It would be a very important thing to lay out and coordinate our policies."

An OPEC-like copper cartel would aim to stem a steep slide in copper prices that has reduced mining profits and investment and boosted unemployment, slowing both countries' economies.

Chile produced 5.6 million metric tons of copper in 2008, while Peru produced 1.3 million metric tons.

Yet prices have dropped more than 60 percent since last year as economic turmoil slows global demand for the metal, with copper futures for May delivery closing at $1.54 per pound in New York on Friday.

The decline cut net income at Chile's state-run Codelco, the world's top copper miner, by nearly half to $4.5 billion in 2008; while Southern Copper Corp., one of Peru's biggest miners, posted a $125 million net loss in the fourth quarter, compared with a $311 million profit in the year-ago period.

Meanwhile, 9,000 miners have been laid off in Peru and new projects have been suspended, including Southern Copper's plan to invest $1 billion in the Tia Maria mine.

The cutbacks already helped slow Peru's yearly economic growth rate to 5 percent in January.

The world's last copper cartel, the Intergovernmental Council on Copper Exporting Countries, was formed in the 1970s by Peru, Chile, Zaire and Zambia.

It was dissolved in 1988 after limited success coordinating supply.

Miners previously worked together to set prices, with companies like Anaconda, once the world's biggest copper producer, joining the now-defunct International Copper Cartel in the 1920s.

Latest business news from AP-Wire

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Next In Business News

CMS deputy group chairman takes leave of absence�
Willowglen bags RM7.84mil PowerGas job in Singapore�
Top Glove slashes Hong Kong stock offering to RM4.22bil�
BHIC secures RM78.14mil Navy submarine facilities contract
SC to create Islamic Fintech accelerator programme
Bank Pembangunan appoints Nazir Razak as new chairman
Proton spends over RM200mil on new stamping facility
Pekat Group seeks listing on Bursa Malaysia's ACE Market
FBM KLCI rebounds to end above 1,600-level
Govt approves RM1.38bil for Penjana SME programme as of April 9

Stories You'll Enjoy


Vouchers