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

To: LoneClone who wrote (30430)	12/16/2008 9:31:24 PM
From: LoneClone	Read Replies (1) \| Respond to of 193999

Penoles may delay big zinc refinery planned expansion Mexico top miner Penoles' chief financial officer said the company had been considering expanding the 230,000-tonne-capacity refinery in Mexico to 340,000 tonnes but market conditions have forced it to reconsider. Posted: Tuesday , 16 Dec 2008 MEXICO CITY (Reuters) - mineweb.com Penoles (PENOLES.MX) may delay a planned 48 percent expansion of its main zinc refinery due to slowing demand for the metal, the base metal miner's chief financial officer told Reuters on Tuesday. Leopoldo Alarcon said Penoles had been considering expanding the 230,000-tonne-capacity refinery in Mexico to 340,000 tonnes but market conditions have forced the company to reconsider its long-term outlook. "All the expansion projects, for example the zinc refinery and some of the mines, are under revision for postponement," Alarcon said in a telephone interview. A definitive decision about whether to delay investments at the refinery, located in the sprawling MetMex metals processing complex in the northern state of Coahuila, would be made in mid-January, he said. "It is very likely that we will postpone the investment, but it is not official until the board confirms it," Alarcon said. If expansion plans were cut back there would be no change in the company's current output of industrial metals, including zinc and lead. "For 2009, we don't expect a significant difference in the production levels we had in 2008," he said. Zinc prices, like those of other industrial metals, have plummeted in recent months as global financial markets suffer their worst downturn in 80 years. But zinc made small gains in November, ending the month at $1,200 a tonne, up from $1,140 a month earlier, helped because zinc producers have moved quickly to cut output, shut mines and shelve projects. Earlier this year, Penoles spun off precious metals operations to form Fresnillo (FRES.L), which runs the world's largest silver mine, and float the company's shares on the London Stock Exchange. Penoles said on Monday it took a hit from dropping values of its derivatives, like many other Mexican companies in recent weeks, some of which have suffered massive losses. Penoles said it lost $137 million (1.509 billon pesos) in 2008 on its derivatives and around $261 million (2.866 billion pesos) in 2007. Penoles' shares rose 4.11 percent to 129 pesos per share in mid-day trade. ($1= 10.949 at end September) (Reporting by Mica Rosenberg; Editing by Christian Wiessner)