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

To: LoneClone who wrote (34791)	3/27/2009 8:09:37 PM
From: LoneClone	Read Replies (1) \| Respond to of 194504

UPDATE 1-CRU/CESCO-Anglo American Chile says cash flow fine Fri Mar 27, 2009 1:28pm EDT reuters.com (Adds details from third paragraph, byline) By Manuel Farias SANTIAGO, March 27 (Reuters) - Anglo American has sufficient cash flow to fund giant multibillion-dollar copper projects in Chile, but raw material costs in particular have not come down in line with tumbling prices for the red metal. In an interview with Reuters ahead of the annual CRU/CESCO copper conference in Chile, Anglo American Chile Chief Executive Miguel Angel Duran said copper prices, slightly recovered from a sharp drop late last year, should hold current levels for the rest of the year. Duran said, however, that copper prices, near $1.80 per lb compared to levels over $4 in July last year, were in line with company expectations on the heels of the global economic crisis that sent demand plummeting. "We have no special concerns about cash flow requirements," Duran said at his offices in the Chilean capital Santiago. "We more or less planned for scenarios like the ones we have today for the rest of the year." EXPANSIONS Anglo American (AAL.L) starts work on a giant expansion at its Los Bronces copper mine in Chile later this year. The company sees the cost of the expansion at between $2.2 billion and $2.5 billion, up from $1.74 billion when it was first proposed. Duran said Anglo American will likely start to boost copper output around 2011, largely thanks to new output from Los Bronces and from Collahuasi, the mine it owns in conjunction with Xstrata Copper (XTA.L). He said output would also get a boost as ore grades at Anglo American's El Soldado division start to rise in 2011 after a slump in grades this year seen running into 2010. Anglo American Chile produced 638,792 tonnes of copper in 2008 from Los Bronces, Mantos Blancos, El Soldado, Mantoverde and its 44 percent-stake in Collahuasi. It also produced 3,665 tonnes of molybdenum. Duran said the company was also considering projects to extend the mine life of the Mantos Blancos and Mantoverde copper divisions and said cash flow was sufficient to fund projects in the pipeline. MARGINS SQUEEZED At the same time, Duran said company costs remain high because prices for raw materials, many of them ordered far ahead of time, have not come down at the same rapid rate as copper prices. "Costs have not fallen at the same speed as prices, and that presents a great challenge" to margins, he said. "It is about maintaining margins when the price has come down drastically and costs have not." Copper prices have received a boost in recent weeks on the back of heightened buying from China, which is the world's largest consumer of copper -- used to supply the wiring and tubing needs of massive infrastructure projects. Duran said China's buying was to restock inventories at cheap prices. "They have no urgent need to use the copper now, it's for inventories," he said. (Reporting by Manuel Farias; writing by Pav Jordan; Editing by John Picinich)