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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (28362)	11/3/2008 10:02:54 PM
From: LoneClone	Read Replies (1) \| Respond to of 193446

UPDATE 1-Palamin sees at least flat Q4 profit if prices hold Mon Nov 3, 2008 6:51pm EST reuters.com * Sees Q4 profit at least flat if copper prices hold * Sees Q4 profit down Qtr/Qtr if copper prices hold * Copper prices seen at $3/lb in up to 18 months * Will consider cutting smelter if prices fall to $1/lb. (Adds details, quotes) By Agnieszka Flak PHALABORWA, South Africa, Nov 3 (Reuters) - Palabora Mining Ltd (Palamin) (PAMJ.J: Quote, Profile, Research, Stock Buzz) copper mine expects flat earnings or a small profit in the fourth quarter if the metal price stays at current levels, the manager of the underground mine said late on Monday. But Dawid Pretorius also said the profit would be lower than the the previous quarter. Palabora is 58-percent owned by global miner Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) (RIO.AX: Quote, Profile, Research, Stock Buzz) and 17-percent by Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz). "With the cost of copper where it is right now, we expect to break even in the fourth quarter or make a small profit but not as big as in the previous quarters," he told Reuters during a media visit to the mine. Copper for December delivery HGZ8 closed at $1.84 per pound in New York on Monday. The metal lost more than half of its value in the last three months. Pretorius said he told his team not to "set any records" in output in light of the crisis dampening the copper price, but the mine is not planning to cut the 33,000 per tonne daily average output, now some 10 percent above the design capacity. He said he expected the mine to continue to produce at those levels during the current and the next quarters. But the mine is looking at ways to cut costs and make the operations more profitable, he said. "If we reduce costs by the first quarter of 2009, then we will have a good first quarter as well. I think that's possible," he said. Pretorius said the company could "live with" a copper price level at around $2 per pound, and $1.7 per pound meant most miners could break even. But he said it was $3 per pound that would be the more comfortable level for the mine, a level he expects prices for the metal to reach within the next year-and-a-half. "I don't think this crisis is going to last that long. I expect in 12-18 months the price for copper will get to the comfortable $3 per pound level," he said. But the mine would consider closing down it's copper smelter if the price fell further to $1 per pound. "That part of the business is costing us a lot of money with a very small margin," he said, but added that most miners would close down capacity if prices fell to those levels which would in turn shorten supply and have prices rebound. (Editing by Bernard Orr)