Copper prices have risen in New York, as a strike at the world’s fourth biggest mine continues.
Workers at Sandvik’s Tomago site have walked off the job in protest of plans by the company to cut redundancy provisions.
Anglo American Plc and Xstrata Plc’s Collahausi venture in Chile says it will ignore union calls to resume wage talks and will instead continue negotiating directly with workers to end the strike.
The strike has pushed the copper prices to a record high and experts predict it will continue to rise if workers demands are not met.
“The supply situation could tighten in the short term if the strike at Collahuasi does not end soon,” Commerzbank AG said in a report.
Demand for copper has risen beyond expectations recently, with the world usage outpacing supply by 19 000 tons in August, according to the International Copper Study Group (ICSG).
“Demand recovery momentum continued to pick up pace, with usage jumping 13% year-on-year (up from 6% the previous month), above our expectations and continuing this year’s trend of upside demand surprises,” Barclays Capital said in a report.
The demand will be welcome news for Australian company Kimberly Metals Ltd, who have announced plans to develop a copper mine in Condobolin, in Central West NSW.
The $7.5 million project will produce around 200 000 tonnes of ore each year and job opportunities in the area, with the company saying they intend to employ locally for the mine.
Work to build the mines is already underway and is expected to start production in May.