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Gold/Mining/Energy : Copper - analysis -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (181)	8/28/2000 1:58:10 AM
From: Henrik	Read Replies (1) \| Respond to of 2131

MIM wins copper gains in Australia 15:56, Monday, 28 August 2000 BRISBANE, Aug 28 (Reuters) - Diversified miner MIM Holdings Ltd said on Monday it has turned around its copper business in and expects low unit costs and higher output to continue at its Australian operations. MIM group executive operations Vince Gauci said an earnings before interest and tax (EBIT) turnaround of A$117 million at Mt Isa -- to $83.1 million EBIT in 2000/01 -- was due to lower unit costs, increased copper sales and a higher copper price. Gauci told a briefing after the release of the group's annual results that its Mt Isa unit had produced record smelter and refinery output due to expanded operations, with a higher proportion of copper sold as metal, rather than concentrate. "Conversion costs at Mt Isa's smelting and refining units are now among the lowest in the world, at about 12 US cents per pound," he said. MIM earlier reported a net profit of A$166.6 million, compared with a A$50.1 million loss a year ago. The company said its 51 percent owned Ernest Henry project produced 48,345 tonnes of copper concentrate in 2000/01 compared to 47,765 tonnes last year. Total copper production was 246,409 tonnes in 2000/01 compared to 229,594 tonnes last year. Gauci said record production was achieved despite MIM gaining little revenue from gas sales to the fertiliser plant at Phosphate Hill, run by WMC Ltd, which has been beset with problems. At Ernest Henry, increased earnings flowed from higher copper prices, offseting the lower gold price, with sales marginally higher than the previous year. Mining costs had been significantly reduced after MIM took over management of operations from a contractor in December 1999, he added. MIM's plans for further exploration around Ernest Henry had been bolstered by the rising price of copper and falling world inventories, to about 45 percent of their recent peaks. However, the blot on MIM's copper operations was the Alumbrera mine in Argentina, where it has a 50 percent interest, while North Ltd and Rio Algom hold 25 percent each. Management problems at the Alumbrera mine, in the country's north west, had contributed to lower production and poor mill performance, Gauci said. Production fell to 81,081 tonnes of copper concentrate in 2000 from 100,022 tonnes last year. "Although the EBIT was a marginal improvement on last year, the gains from the higher copper price and lower treatment charges were offset by higher costs and lower production, particularly in the June half," he said. "Alumbrera's operating performance was disappointing and although the lower grades were anticipated in the June half, we also achieved lower throughput for the mill at lower gold recoveries." Gauci said MIM had reviewed the project's management structure and made changes to overcome the problems and provide greater focus on operations at the mine. Management changes have seen utilisation of the Alumbrera mill pick up from a low of about 73 percent in February 2000 to about 90 percent in June 2000. "This improved performance will help towards a more improved operating performance towards the second half of the year," he said. MIM shares were trading up two cents at A$1.18 shortly before the close of trade. (c) Reuters Limited 2000 REUTER NEWS SERVICE