We have been going inside the copper mining industry through former post (larger open pit mines, copper mines, countries source of the natural resource & mining companies). enlazar con todos los posts. During this path we have learned that there are some (not too many) countries in which copper is hold and that there are some (not too many) companies who are in charge to extract and to commercialize the natural resource.

It is starting to be a bit tricky to understand the real role of every player at the copper mining industry. The fact is that mines, as natural resources (copper) sources, are in the middle of countries and enterprises. Countries have the resource and companies exploit them as you can see in the graph.

copper country-mine-company

Left: countries; Middle: mines; Right: companies. Source: Jose Subero, http://city-lines.com

As mines are part of different countries it is possible to simplify the graph just taking them out of the graph. This will take us to a graph in which companies and countries are face to face and where it is possible to see the relation between them.

copper country-company

Left: countries; Right: companies. Source: Jose Subero, http://city-lines.com

This graph shows how important are the relations between countries and companies and how they play some kind of global game around the copper extraction business. It is easy to understand how Chile, China & Peru or Codelco, GlencoreXstrata & FCX have to be players who are able to influence the global copper market.

But I think that for a better understanding of the copper mining industry it is possible to make another simplification. As there are not too many enterprises as significant players we can assume that those companies are supported by their own governments (as an example we are assuming that CODELCO is supported by Chile and that FCX is supported by the USA in the international markets). So we can assume that companies can be represented by their nationality to develop an Index to measure the Country-Influence in copper extraction activity. You can see the companies’ origin in the following table:

ENTERPRISES COUNTRY OF ORIGIN
CODELCO Chile
Freeport-McMoRan Copper & Gold Inc. (FCX) USA
GlencoreXstrata Switzerland-UK
BHP Billiton Australia-UK
Grupo Mexico México
Rio Tinto UK
Anglo American UK
Antofagasta Chile
Jiangxi Copper Company China
Teck Canada
Mitsubishi-JX Nippon Mining&Metals Japan
Sumitomo Japan
MMG Limited Australia-China
China Molybdenum Co Ltd’s, CMOC China

 

Assuming that the place where the mineral is extracted weights 50% and the origin of the mining enterprises weights another 50%, we can create an Index that represents the performance of the different territories in the copper extraction industry. The Index is based on the production of copper, so if we divide the Index with the total Tons of world copper production we can create a normalized Index as follows:

COUNTRY-INFLUENCE COUNTRIES INDEX COMPANIES INDEX INDEX NORMALIZED INDEX
Unknown 4.082.626 4.082.626 22,37
Chile 2.890.000 1.161.524 4.051.524 22,20
USA 625.000 749.585 1.374.585 7,53
UK 1.199.796 1.199.796 6,57
Other countries 961.835 961.835 5,27
China 800.000 64.684 864.684 4,74
Australia 495.000 345.848 840.848 4,61
Peru 690.000 690.000 3,78
Mexico 240.000 369.069 609.069 3,34
Democratic Republic of Congo 485.000 485.000 2,66
Canada 316.000 166.719 482.719 2,64
Other 445.970 445.970 2,44
Russia 416.500 416.500 2,28
Zambia 380.000 380.000 2,08
Switzerland 315.873 315.873 1,73
Indonesia 252.000 252.000 1,38
Japan 225.308 225.308 1,23
Kazakhstan 223.000 223.000 1,22
Poland 214.500 214.500 1,18
Argentina 54.801 54.801 0,30
Laos 45.015 45.015 0,25
Mongolia 38.350 38.350 0,21
TOTAL 9.127.001 9.126.999 18.254.000 100,00

Source: Jose Subero, http://city-lines.com

As you can see from the table above, there is a 27,64% of Index that haven’t been specified because a lack of information of the project, but it is interesting to see some aspects as the strength position of Chile or the emergence of the UK in the index, a country with no copper resources in its land. It is interesting, as you can see in the figures that follows that there are countries that have influence because the resource (as Peru), the enterprises (UK) or both (Chile)

copper country-influence Index

X:Country-Index; Y:Enterprises-Index; Size of circles:Global-Index; Source: Jose Subero, http://city-lines.com

copper country-influence Index-Reduce

X:Country-Index; Y:Enterprises-Index; Size of circles:Global-Index (detailed index); Source: Jose Subero, http://city-lines.com

 

 

Leave a Reply