New | KGHM bets on copper price fall reversing
KGHM to keep on spending, sticking to US$9 billion five-year investment plan
Copper miner KGHM has no plans to follow competitors in cutting spending on mines and projects in reaction to bruised copper prices as it expects prices to recover soon, the head of the company's international operations said.
KGHM International chief executive Derek White said the Polish-based company, which is Europe's second-biggest copper miner, was sticking to its commitment to invest US$9 billion over the next five years.
"We're going to invest because we are betting on the fact that this [copper price fall] is a short-term phenomenon that is financially created," White said at the Prospectors & Developers Association of Canada convention.
Chinese hedge funds were linked to a powerful sell-off in copper in January, when the price of the metal fell nearly 12 per cent in two days. Copper has dropped about 26 per cent since the end of 2012, forcing miners such as Glencore and First Quantum Minerals to slash capital spending.
On Monday, copper rose to US$5,960 a tonne, its highest level in seven weeks, after China unexpectedly cut interest rates.
"The supply-demand equation is significantly underestimated," White said.