For Sale in Chile: Prospective Copper deposits, only one previous owner

Map of Chile (it fits better this way)

A very interesting report from BN Americas on a speech given by Codelco's CEO Arellano yesterday. The prospect of some tasty copper resources coming on the market in everyone's favourite miner-friendly Chile might put the damper on investment in other parts of the world as mineheads change plans and head South. Here's the BN Americas report:

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Once markets start booming again Chile's state copper company Codelco will rid itself of more properties it owns but which are too small for Codelco to be interested in taking into production, CEO José Pablo Arellano said.

Codelco's most recent attempt to rid itself of one of its many small and mid-size copper properties in Chile was a try at bidding out 66% of the Inca de Oro deposit in region III near its Salvador mine, an effort to keep the mine open past its 2011 closure date.

But with the global crisis Codelco postponed the bidding indefinitely. "We've all fallen victim to the financial crisis," both large and small miners, Arellano said in a speech at a luncheon hosted by Chile's engineer's association in Santiago.

Prior to that Codelco unloaded the Boa Esperança project in Brazil for US$80mn to local miner Caraíba.

But despite the sales, Codelco has been accused for some time of hoarding deposits by Chile's small and mid-size copper miners.

CONTINUES HERE

Great News! Codelco's CEO calls copper at $1.60/lb for 2009

Here's how Bloomberg kicked off its report on Codelco chief Arellano's speech to Chilean mining industry people today:

Dec. 15 (Bloomberg) -- Copper prices will be “depressed” next year and demand almost “stagnant” as the international economic crisis leads to higher stockpiles of the metal, Codelco Chief Executive Officer Jose Pablo Arellano said. Demand won’t recover until 2010, Arellano said today in a speech yada yada continues here

Depressed? Stagnant? Economic crisis? Higher stockpiles? "Jeesh Otto", I hear you sigh "what's so great about this news?" That's easy, oh kind and gentle lector of IKN: Chileans famously and magnificently suck at predicting the copper market. Here's a little chart showing how Cochilco, the official Chilean gov't copper think-tank people have called the market over the last four years.

• In February 2005, they said copper would average U$1.18/lb for that year. It averaged U$1.67/lb (Norvege, nul points)
• In February 2006, the Cochilco prediction was U$1.74/lb. The final result was U$3.04/lb (oh how they laughed)
• Stopped clock year was 2007, as Cochilco's $3.20/lb forecast missed by just three cents (U$3.23). (lucky)
• But by this year they were back on full form. In July Cochilco adjusted its forecast upward 30c to $3.70/lb for the year. Oops! With just a couple of weeks left on the 2008 calendar, it looks like copper will come in at around $3.08/lb. (DOH!)

So on to 2009, and in November Cochilco slashed its 2009 forecast to $1.65/lb (from $3.10). Now with Arellano basically agreeing by calling $1.60/lb today the stage is set for an almighty rally. You'd better thank those boffins from Santiago when copper rushes back over $2/lb and sets sail skywards after the Chinese New Year (I hope).