News Alert from Reuters via Quote.com
Topic: (NYSE:PD) Phelps Dodge Corp, (TSE:NOR) Noranda Inc.,
Quote.com News Item #5737386
Headline: Weak copper price worries Zambia consortium- Avmin
======================================================================
JOHANNESBURG, March 12 (Reuters) - South Africa's Avmin Ltd
(JOH:AVMJ) said on Thursday the weak copper price was a worry for
the Kafue consortium which is conducting a study to seal two
Zambian mine purchases, but the investigation was moving along
steadily.
London traders have speculated that recent weakness in the
copper market had prompted the consortium to delay closing its
acquisition last year of Zambia Consolidated Copper Mines'
(SBF:ZCC) mineral-rich Nkana/Nchanga mines.
The consortium, comprising Avmin, U.S.-based Phelps Dodge
Corp (NYSE:PD), Canada's Noranda Mining and Exploration Inc
(TSE:NOR) and the Commonwealth Development Corp, has been
conducting a due diligence since its successful bid in November.
"Obviously (the copper price) is a concern. We are watching
it very carefully, and part of the whole process is that we are
looking at numbers with new copper prices," Avmin spokesman
Julian Gwillim told Reuters.
"The whole consortium is working together to come to a final
solution," he added.
The benchmark London Metal Exchange price has fallen more
than 30 percent in the past nine months on growing supply from
the United States and South America and weak Asian demand.
There has also been speculation that the Zambian government
is getting impatient to put to bed the sale of its copper crown
jewels, but Avmin denied any knowledge of this.
"That has not been indicated to us. It is a very complex
process and both parties, Kafue and the Zambians, have a
tremendous amount of work to get through," Gwillim said.
A Phelps Dodge executive said on Wednesday that the copper
price created concerns for the project in the future, but there
were other obstacles affecting the close of the mines purchase.
The mines account for about half of Zambia's copper output.
"It's not the copper price, per se, that's causing the
delay," Phelps Dodge vice president and treasurer Thomas Foster
told Reuters.
"Certainly it doesn't help and it makes the project more
problematic going forward, but there's still a number of issues
to be resolved that are unrelated to the copper price."
He said Phelps Dodge was seeking indemnity of certain
environmental liabilities associated with the project and the
establishment of a town site also had to be settled.
Nkana and Nchanga produced 171,666 tonnes of copper and
4,252 tonnes of cobalt in the financial year ended March 1997.
No price tag for the purchase has been made public, but
mining analysts have speculated it was in the region of $250
million, topped up by further commitments of hundreds of
millions of dollars to jack up production.
newsroom@reuters.co.za))
Copyright 1998, Reuters News Service |
