Copper output from the top miners continued to rise on an annual basis in the second quarter of 2021, outstripping gains in the first quarter.
Production increased 2.2% year over year to 3.4 million tonnes in the second quarter, according to an analysis of the top 20 copper producers by S&P Global Market Intelligence. In the first quarter of 2021, production increased 1.1% year on year.
Growing output fell in line with Market Intelligence expectations for 2021, comprising copper supply increasing to 26.4 million tonnes in 2021 from 25.0 million tonnes in 2020.
"We project an increase in the global copper mine production this year, mainly owing to some new capacity starts and expansion projects, despite falling ore grades at some operations," Market Intelligence analyst Aline Soares said in an email. Market Intelligence analysts forecast a 6.7% increase in mined copper output in 2021 as of early June.
Among the largest copper miners, Codelco and Freeport-McMoRan Inc. continued to top the list of producers reporting gains. In the second quarter, Codelco output climbed 13.4% year over year to 464,000 tonnes, while Freeport's production increased 17.3% to 335,658 tonnes.
"For Codelco, the positive output growth in the second quarter over the same period in 2020 comes mostly from higher processing rates at the El Teniente and Radomiro Tomic mines and better grades at Ministro Hales," Soares said.
In Freeport's case, climbing output owed to the ongoing ramp-up of the Grasberg underground copper-gold mine, with production in 2022 set to exceed 700,000 tonnes, Soares said.
Freeport exceeded production targets in the second quarter while the ramp-up of Grasberg remained on track, Chairman and CEO Richard Adkerson said during a July 22 earnings call.
As for declining output, PJSC Norilsk Nickel saw the steepest production drop, by 34.8% or 43,509 tonnes year over year. Production decreased in the wake of operational woes at the company's Oktyabrsky and Taimyrsky copper mines in Russia earlier in 2021, where water issues curtailed output.
Oktyabrsky was back to full production as of early August, while Taimyrsky was at 80% capacity with expectations for full production by the end of the year, CFO Sergey Malyshev said during an Aug. 5 earnings call.
"We believe that production losses had most of their negative impact on the first-half results," Malyshev said.
Copper mining executives outlined bullish views during second-quarter earnings calls as copper demand continued to increase amid an ongoing push to lower fossil-fuel related emissions of carbon dioxide, a greenhouse gas, and electrify the transportation sector.
"Copper is just simply essential to a green economy. This transition is now just beginning to unfold," Adkerson said July 22.
In a similar vein, BHP Group recently outlined a strategy focused on what it called "future-facing commodities" amid a merger of its oil and gas assets with Woodside Petroleum Ltd. BHP Group CEO Mike Henry pointed to "unprecedented" copper demand stemming from electrification during a recent earnings call.
"There's growing recognition of the critical role that copper, nickel, iron ore and even metallurgical coal for steelmaking as well as potash for improved farming practices have to play in the energy transition and in ensuring a sustainable world," Henry said Aug. 17.
In terms of copper's supply-demand balance, Market Intelligence analysts have projected modest-sized deficits in 2021 out to 2025. The deficit is projected at 276,000 tonnes in 2021 and between 100,000 and 300,000 tonnes in the subsequent four years.
