A Chile country-specific exchange traded fund rallied on Thursday as the prices of copper, Chile’s top export, strengthened on supply disruptions in the emerging Latin American country.
Among the best performing non-leveraged ETFs of Thursday, the iShares MSCI Chile ETF (NYSEArca: ECH) surged 5.4%.
Global miner BHP said Wednesday it would cut down activity at its small Cerro Colorado copper mine in Chile due to the coronavirus, Reuters reported. The mine produced 71,700 metric tons of copper in 2019, or about 1.2% of Chile´s total output.
“Lockdowns are easing in many economies and that should drive up demand,” WisdomTree analyst Nitesh Shah told Reuters. “At the same time, mines in Chile are experiencing problems in terms of COVID-19 cases.”
Chilean stocks may have strengthened on the prospects of continued work at some of the country’s most prominent mining sites, which have continued to support the economy during the global downturn.
Chile´s state-run Codelco, the world´s largest copper producer, warned Thursday that any action to increase restrictions on mining amid the coronavirus outbreak would be “catastrophic” for the country, Reuters reports.
Codelco CEO Octavio Araneda said the company acted quickly and proactively to contain the COVID-19 outbreak.
“Once the pandemic is passed, every peso we generate will help to lift our country tomorrow,” Araneda told Reuters.
The mining giant previously stated in April and May it held output and copper shipments steady, despite the pandemic. However, the quickly spreading virus has raised the number of infected at the company and triggered calls for further shutdowns. Union groups calculate at least 2,300 of Codelco’s workers have been infected.
Araneda underscored the safety measures the company has taken, including longer shift rotations at its flagship El Teniente mine and temporary shutdown at its Chuquicamata smelter and refinery.
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