Straits sees more copper in 07 after mine changes

Straits sees more copper in 07 after mine changes

Straits Resources Ltd. said on Tuesday it expects its Whim Creek copper mine in Australia to return to full production in 2007 after ore processing difficulties cut output last year.

Production at the mine totalled 3,662 tonnes in the fourth quarter, taking full-year output to 14,800 tonnes, 1,200 tonnes below normal, it said.

Higher-than-usual iron content in copper-bearing ores mined last year required additional treatment during the leaching process at the mine.

“The problem is being rectified by improving housekeeping, solution control and replacing old cathode plates and production is expected to return to design capacity of 16,000 tonnes per year in 2007,” the company said.

A second mine in Australia run by Straits, the Tritton lode, yielded 5,794 tonnes of copper in the fourth quarter, bringing the mine’s annual take to 23,088 tonnes, a 20 percent increase year-on-year, the company said.

Straits recently reached a revised supply agreement with commodities trader Sempra Metals SRE.N for the mine’s output after arguing that it was unable to economically produce a copper concentrate under the terms of an original agreement, forged when copper prices were much lower.

“As a result, Tritton will be able to significantly expand its production in the near term and gain exposure to more favourable marketing terms as well increased exposure to current high copper prices,” the company said.

Copper prices, which zoomed to a record $8,800 a tonne in London Metal Exchange trading MCU3 in May, have mostly been in decline ever since, ending 2006 at only $6,630 a tonne. The price has since dropped a further $1,000 or so.

Straits, whose stock has fallen about 10 percent since July in step with declining copper prices, fell 0.6 percent to A$3.40 on Tuesday, lagging a 0.9 percent gain in the S&P/ASX200 index of leading companies.

Straits, which also mines coal in Indonesia via a 60 percent stake in Straits Asia Resources Ltd.STRL.SI, and gold, is looking to boost production and add antimony, zinc and salt to its portfolio. ($1=A$1.30)

Source: Reuters

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