Mine Expansion On The Cards
JOHANNESBERG- Shares in Palabora Mining, South Africa’s biggest copper producer located in the middle of the K2C Biosphere in Phalaborwa, gained by a quarter after the company hosted an analyst visit at which it detailed output trends and a possible R3.2bn expansion.
Palabora, controlled by Rio Tinto Group, could start a study next year into the viability of extending the mine’s life beyond 2015, according to a presentation posted on its website after the visit. The company also plans to increase sales of magnetite, a type of iron ore, and to process stocks of copper ore that were previously unprofitable to treat, the presentation said.
It’s too early to say whether Palabora will borrow money to finance the project, which could start as early as 2008 and take eight years to complete, Chief Financial Officer Charles Asubonten said yesterday from his office in Phalaborwa.
The stock gained on improved production, the weaker rand and high copper prices, said Nick van Rensburg, who attended the visit and helps manage a $300m fund at Peregrine Capital.
Shares of Palabora, which operates South Africa’s largest copper mine, jumped 25% to R44,50 since the October 6 visit. The stock climbed 8,7% on October 9, the first day of trading after the visit.
Investment in increasing the life of the mine could take place over a decade, Nick Cobban, a spokesman for London-based Rio, said in a telephone interview on Tuesday from its London headquarters. He gave no further details.
Palabora plans to mine about 11m tons of copper-bearing ore this year, and 12m in 2007/8, compared with 10m tons in 2005, according to the presentation.
An increase in production will help offset the affect of agreements the company made last year to sell a portion of its production at less than half the current market price for seven years. The contracts cut Palabora’s exposure to copper prices, which quadrupled in the last five years, spurred by Chinese demand for materials to fuel its booming economy.
Palabora, controlled by Rio Tinto Group, could start a study next year into the viability of extending the mine’s life beyond 2015, according to a presentation posted on its website after the visit. The company also plans to increase sales of magnetite, a type of iron ore, and to process stocks of copper ore that were previously unprofitable to treat, the presentation said.
It’s too early to say whether Palabora will borrow money to finance the project, which could start as early as 2008 and take eight years to complete, Chief Financial Officer Charles Asubonten said yesterday from his office in Phalaborwa.
The stock gained on improved production, the weaker rand and high copper prices, said Nick van Rensburg, who attended the visit and helps manage a $300m fund at Peregrine Capital.
Shares of Palabora, which operates South Africa’s largest copper mine, jumped 25% to R44,50 since the October 6 visit. The stock climbed 8,7% on October 9, the first day of trading after the visit.
Investment in increasing the life of the mine could take place over a decade, Nick Cobban, a spokesman for London-based Rio, said in a telephone interview on Tuesday from its London headquarters. He gave no further details.
Palabora plans to mine about 11m tons of copper-bearing ore this year, and 12m in 2007/8, compared with 10m tons in 2005, according to the presentation.
An increase in production will help offset the affect of agreements the company made last year to sell a portion of its production at less than half the current market price for seven years. The contracts cut Palabora’s exposure to copper prices, which quadrupled in the last five years, spurred by Chinese demand for materials to fuel its booming economy.
Labels: mining, Palabora Mining, Phalaborwa
posted by Kruger2Canyons.com at
Sunday, November 19, 2006
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