Chile Collahuasi copper mine may delay expansion
money.iwon.com
Monday November 19, 3:13 PM EST
SANTIAGO, Chile, Nov 19 (Reuters) - Chilean copper mine Dona Ines de Collahuasi may postpone a planned $600 million expansion because of sagging prices for the metal, a senior executive said on Monday.
The company will decide on the expansion at a board meeting later this month. "I believe one of the topics to be analyzed in that meeting is precisely the timing for carrying out the expansion," chief financial officer Tomas Keller told Reuters. "The postponement of the decision to expand is certainly a possibility in the current context," he added.
Keller will replace Diego Hernandez as the company's chief executive officer on Dec. 1, when Hernandez takes the helm at the nonferrous metals unit of Brazilian mining firm CVRD (VALE5). Falconbridge Ltd. (FL) and Anglo American Plc (AAL) each own 44 percent of Collahuasi. A Japanese consortium led by Mitsui Mining & Smelting Co. Ltd. (5706) owns the remaining 12 percent.
Last month, the world's major copper producers began to curtail production to counter weak demand for the commodity and prop up prices. The announcements and expectations of further cuts immediately vaulted copper prices higher. In London, prices rose to a 2-1/2 month high in premarket trading on Monday, above the $1,500 a tonne mark.
The Collahuasi expansion, originally slated to go onstream in 2004, would increase the mine's milling capacity, boosting the output of copper concentrates to an average 396,000 tonnes annually from the current average of 240,000 tonnes.
The company completed the feasibility study for the project in the first quarter of this year and Chilean authorities approved the environmental impact study in September. Simultaneously, Collahuasi plans to move from the open-pit Ujina deposit to the adjacent Rosario ore body.
Higher ore grades at the mine led Collahuasi to post its highest quarterly copper production ever in the third quarter, according to Falconbridge's quarterly report. In 2000, the mine produced 436,000 tonnes of copper. Hernandez said expected annual output in 2002 is about 420,000 tonnes, slightly lower than this year's total. |
