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April 24, 2020

Coronavirus company news summary – World Bank warns of falling metal prices – De Beers revises production guidance – MMG reports fall in copper production

By Matthew Hall

24 April

Diamond mining company De Beers has revised its production guidance to 25-27 million carats from a previous 32-34 million carats, in response to the impact of Covid-19 on mining operations. The move is subject to continuous review, with guidance issued based on the disruptions related to the pandemic as well as the timing and scale of the recovery in trading conditions.

MMG has reported a 20% fall in its copper output year-on-year in the first quarter due to lower production at the Las Bambas mine in Peru, where force majeure was declared as a result of disruptions owing to the Covid-19 pandemic. The site faced additional disruptions to mining and production activities due to maintenance requirements as well as the enactment of a State of Emergency in Peru on 15 March in response to the country’s outbreak.

Chile-based mining company SQM has warned that it might have to scale back plans for this year if a slump in lithium demand continues due to the Covid-19 outbreak. Reuters quoted the company board chairman Alberto Salas as saying that it had planned to invest at least $330m this year to expand production capacity out of the Atacama salt flat in Chile.

In its April Commodity Markets Outlook, the World Bank reported that the global economic shock of the Covid-19 pandemic has driven most commodity prices down and is expected to result in substantially lower prices for the remainder of this year. The report noted that metal prices are projected to drop 13% overall this year as the shutdown of key industries and a slump in demand weighs heavily on the market.

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