Beijing (AsiaNews/Agencies) – China and Chile signed a US$ 550 million deal to jointly mine copper. Under its terms, China Minmetals Corporation and the Corporación Nacional del Cobre de Chile (CODELCO) will establish a joint venture with an initial investment of US$ 550 million that could reach US$ 2 billion.

The capital invested will enable CODELCO to develop its mining activities and supply China Minmetals with 55,000 tonnes of copper ore over a 15-year period.

The two sides appointed the China Development Bank as the lead underwriter for a loan to the joint venture, which will be used to partially fund the initial investment.

This is the first time that Chile allows a foreign company to invest in copper mining, a sector that it dominates with 37 per cent of the world's output.

With its economy growing by near double-digits, China has an insatiable appetite for natural resources, and copper is its second largest type of non-ferrous metals consumed.

State statistics showed that China imported 1.38 million tonnes of copper and 2.88 million tonnes of copper ore in 2004.

The energy and telecommunication fields play the main role in the rising demand for copper (plus 12 per cent in 2004 for 3.3 million tonnes used).

With the summer approaching demand for copper is increasing as power plants try to pre-empt blackouts caused by surging demand for energy production and transmission.

Such upward demand curve has pushed prices for copper and copper ore through the roof, by as much as 1000 per cent.

 "The alliance with CODELCO will allow Minmetals to receive a stable supply of copper from the world's largest copper producer," Zhou Zhongshu, president of China Minmetals, said.

China Minmetals is China's largest metal and mine product trading company. In 2004, its volume of trade with Chilean companies reached 38 million dollars, whilst its total business revenue stood at US$ 15 billion. (PB)