Clueless about copper … in Chile?

October 30, 2008

Nearly 20 foreign correspondents showed up this week to a meeting at the Chilean Copper Commission (Cochilco) to hear the world’s top authority on copper give guidance on where prices were headed.

Maybe copper has not been the sexiest story.  But as a mining correspondent based in Santiago, it must be the first time I’ve attended a news conference where most of the reporters had absolutely no clue about the metal.

Maybe copper has been taken for granted here. For as the copper futures price halved in a matter of months, the news corps is suddenly very interested in a metal that is central to Chile’s economic future, accounting for over 50 percent of exports and the lion’s share of government revenue.

As a regular at the commission over the past three years, I can say most of the other correspondents had never before set foot in the Cochilco building in downtown Santiago.

“It’s that everybody wants to know where the economy is going,” one correspondent said when I asked if she was now covering copper.

Copper prices are falling due to slowing demand in a world economy where fewer cars are being built and construction activity is declining …  good for consumers perhaps but bad for producers and a worrisome indicator of the global economy.

High copper prices made possible Chile’s record government surpluses in recent years and also helped the government sock away $21 billion for a rainy day in sovereign wealth funds.

With signs of a slowdown in No. 1 consumer China, the destination for  much of Chile’s copper exports, the burning question for reporters here is whether copper has lost its sheen for good.

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