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Trump’s 50% Copper Tariff Threatens Revenue for Buenaventura, Antamina, and Southern copper

Lima, Peru – Former U.S. President Donald Trump’s recent declaration of a potential 50% tariff on copper imports is poised to considerably impact major Peruvian mining companies, according to analyses from Inteligo Sab and Kallpa. The proposed tariffs, if implemented, could lead to decreased revenue for companies like Buenaventura, Antamina (owned by BHP and Glencore), and Southern Copper, despite ongoing efforts to improve operational efficiencies.

analysts at Kallpa estimate Buenaventura generated profits of US $100 million during the period analyzed, and project attributable net profit will increase due to higher EBITDA driven by increased income and operational efficiencies. However, this gain could be partially offset by a higher effective tax rate and the impact of lower copper prices resulting from the tariffs. Kallpa also notes a positive impact of US $18 million from foreign exchange rate changes.

Inteligo Sab anticipates that production levels will remain consistent with previously provided guidance for the year. They also predict that production costs will remain stable, mitigating some of the negative effects of the potential tariffs. however, the firm acknowledges that lower copper prices will likely lead to a reduction in overall income.

The proposed tariffs are particularly concerning given Peru’s status as a major global copper producer. In 2023, Peru produced approximately 2.6 million metric tons of copper, representing roughly 10% of global production, according to the Ministry of Energy and Mines (MINEM). The majority of Peru’s copper exports are destined for China (approximately 57%), followed by the United States (around 13%).

The impact on “Cash cost per pound” for companies like strength Save Sa. will be partially counteracted by efficiencies recorded in recent quarters. However, the overall effect of the tariffs is expected to be negative.

Context: The Global Copper Market

copper is a critical metal for the global economy, essential for infrastructure development, renewable energy technologies (electric vehicles, wind turbines, solar panels), and the electronics industry. Demand for copper is projected to increase significantly in the coming decades as the world transitions to a greener economy. Major copper-producing nations include Chile, Peru, China, the Democratic Republic of Congo, and the United States. Fluctuations in copper prices are influenced by global economic conditions, supply disruptions, and geopolitical factors.

The potential tariffs announced by Trump represent a significant shift in trade policy and could disrupt the global copper market, perhaps leading to higher prices for consumers and impacting economic growth.

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