According to him, Chile is the country with the most copper projects in the world. “There are not many new copper mining projects in the world. In fact, the country that has the most projects in this sense at the moment is Chile.” This was indicated by the Minister of Finance, Mario Marcel, last Monday in a new edition of Gobierno Informa.
The Secretary of State was consulted about the rise in the red metal – which this Friday traded at US$4.71 per pound on the London Metal Exchange – and how this affects the value of the exchange rate, which closed the day at $888.
The minister explained that the sustained rise in the price of copper experienced in recent days impacts the price of the dollar, which, in turn, generates benefits for the population with the reduction of costs and inflationary pressures.
What are the reasons for the rise in the price of copper?
The authority indicated that the reasons behind the increase “fundamentally have to do with market conditions. On the one hand, there is a fairly solid demand, not only in the immediate 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. , particularly the development of electromobility. And at the same time on the supply side, there is a fairly inelastic supply.”
These factors have led to the diagnosis of an increase in the price of the red metal, “which will be maintained over time beyond short-term volatility. The report delivered by the Chilean Copper Commission with its new projections for 2024 and 2025 confirms this,” the minister explained.
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 greater activity, greater investment incentive, greater employment and greater tax revenue, which was already reflected in part in the Public Finance report for the first quarter 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 higher price of copper increases the country’s foreign currency income and that values the local currency against the dollar in particular.”
“The value of the dollar has fallen slightly from $900. How does that benefit citizens? Fundamentally reducing the value of imported products, reducing pressures on inflation and in the most immediate future it will manifest itself in the price of fuel, which in the next price update will have a drop of $30 per liter for the gasoline,” the authority announced.
Finally, he added that “it is a trend that will probably continue for a few months. So this thing that at some point generated alarm, which makes people feel greater inflation, is now going to be reversed for the benefit of citizens.”
