Copper prices have fallen, according to news agency Reuters, causing engineering and technology companies to reassess what's happening in the industry and attempt to rectify the situation. The annual World Copper Conference conference (named Cesco/CRU) that took place in Chile this week, found that copper prices will remain low for the next three to five years.
The price of copper is almost at a six-and-a-half-year low due to Chinese growth slowdown which is forcing the mining sector to retrench staff and limit output globally.
Hennie Faul, the head of Anglo American's copper sector said, "The downturn has really made us think differently. It had woken us up...We want our assets to be low cost."
Pertti Korhonen, chief executive of Finnish mining technology company Outotec, told Reuters this past week, "The focus for the industry over the next two years will be on productivity improvement, and all the mining companies trying to reduce their cash costs. There is a lot of opportunity in modern technology, including digitization and automation."
Juan Rayo, CEO of renowned Chilean engineering firm JRI, said, "All engineering companies have needed to adjust themselves in order to get through this rough time...we're anticipating a difficult market, with no more than 5 to 6 million man hours of engineering for mining during the year."
The current price of copper is US$4,650 a ton. This is compared to February 2011's results of US$10,000 a ton, Reuters points out. This would explain why cuts are being made and why jobs are being lost; they have lost more than half of the money in copper in a matter of years.
Korhonen has the solution, however. He says, "If you reduce your energy consumption, you reduce your water consumption, you improve your throughput, you can get immediate opex savings, you can get immediate advantages. So I think if the numbers talk for themselves, they will find the money."