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That's actually a bit wild that Chile isn't refining or smelting copper. Is it because there's not the energy capacity to run smelters? I thought Chili had a
by cogman10 6mo ago
That's actually a bit wild that Chile isn't refining or smelting copper.
Is it because there's not the energy capacity to run smelters? I thought Chili had a pretty abundant energy grid (mostly hydro as I recall).
- compass_copium 6mo agoThese systems aren't in place by accident. The US doesn't typically purchase roasted coffee beans or chocolate bars from South America either.
- cogman10 6mo agoRoasted coffee loses flavor after roasting. Chocolate requires various ingredients to make that changes the characteristics of the chocolate. It also, famously, doesn't ship well. Copper ingots, however, weigh less than copper ore and if they are actually too low quality they can be resmelted into a more pure level. The only reason I can think of why you might actually want the ore is you also want and are extracting other secondary minerals.
- jjk166 6mo agohttps://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage
- ninalanyon 6mo agoAustralia behaves the same way, exports ore to China and buys back the refined products. Both countries have abundant energy (hydro and solar) but have old fashioned mining interests in charge.
- nemomarx 6mo agoWhy do the mining interests prefer exporting it to selling to some local processor? you could probably get similar prices and the transport wouldn't be as complex, right?
- ImPostingOnHN 6mo agoGiven the comparative economies of scale, you would probably get lower quality of product, and potentially higher prices, if a local processor exists at all.
- nemomarx 6mo agoSure, which is bad for the consumer of copper. But the mining companies don't have an obvious reason to be unhappy about that? the smaller local market won't have any alternative sources and might have to pay them more if it existed so you'd think they would be encouraging some small local smelters or etc if anything. It would be everyone else who buys copper who has reason to be against doing it locally
- bigyabai 6mo ago> the smaller local market won't have any alternative sources Ea-nāṣir will still receive complaints, presumably.
- jandrewrogers 6mo agoThe cost of refining ore varies widely based on electricity, regulatory, and other costs. Proximity to the end user of the refined product also figures into it. Shipping bulk materials is very inexpensive. Buyers in other countries with low refining costs can pay prices that would bankrupt a local refiner and still make a profit. This is common for bulk industrial materials. For example, it is cheaper for many countries to send their crude oil to the US to be refined than for them to refine it themselves.
- bee_rider 6mo agoI wonder if they just prefer the bigger contracts that they can (presumably) get from overseas customers? Why negotiate twice, especially if somebody in China says “yes, as much as possible.”
- SoftTalker 6mo agoSmelting and other processing of raw materials tends to be a dirty process and might face difficult or impossible permitting and regulatory hurdles locally. Easier to outsource it to a country that is too poor or too corrupt to care.
- sidewndr46 6mo agoisn't it literally the same company, Rio Tinto?
- dietr1ch 6mo ago> Is it because there's not the energy capacity to run smelters? Most mines are in the north, but the hydro capacity is far from them in the south. That's one challenge, but to me doesn't explain why. Chile nationalised copper with aims to develop our industry, but then the US decided to sabotage our democracy.