According to him, Chile is the country with the largest number of copper projects in the world. “There are not many new copper mining projects in the world. In fact, the country that has the largest number of projects in this sense at the moment is Chile. This is what Finance Minister Mario Marcel pointed out last Monday in a new issue of the newspaper Goberno Informa.
The Secretary of State was consulted about the rising price of the red metal – which on Friday traded at $4.71 per pound on the London Metal Exchange – and how that is affecting the value of the exchange rate, which closed the day at $888.
The minister explained that the continuous rise in copper prices witnessed in recent days affects the price of the dollar, which in turn brings benefits to the population while reducing costs and inflationary pressures.
What are the reasons for the high price of copper?
The authority indicated that the reasons for the increase “are mainly due to market conditions.” On the one hand, there is a fairly strong demand, not only in the near term, with the reactivation of the world’s economies, but also in the medium term, as a result of all the investments and all the development linked to climate change issues. Especially the development of electric mobility. Meanwhile, on the supply side, there is somewhat inelastic supply.
These factors led to the diagnosis of an increase in the price of the red metal, “which will continue over time beyond short-term fluctuations.” The minister explained that the report submitted by the Chilean Copper Commission with its new forecasts for the years 2024 and 2025 confirms this.
How does it benefit the country?
Likewise, the authority explained that this better copper price benefits the country in several ways. “It benefits the country, in terms of increased activity, increased investment incentives, increased employment opportunities, and increased tax revenues, which is already partly reflected in the first quarter fiscal report that we released a few days ago,” he said. .
On the other hand, he said, “This is also reflected in the exchange rate, because the rise in the price of copper increases the country’s income in foreign currency, and this is what raises the value of the local currency against the dollar in particular.”
He added: “The value of the dollar decreased slightly from $900. How does this benefit citizens? The authority announced a fundamental reduction in the value of imported products, reducing pressures on inflation, and in the near future this will be evident in the price of fuel, which in the next price update will witness a decrease of $30 per liter of gasoline. .
He finally added, “This trend will likely continue for a few months.” So this thing that at one point caused concern, that made people feel more inflation, will now be reversed to the benefit of the citizens.
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