Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

LMEWEEK-Copper producer KGHM says not planning to suspend more operations

Published 2015-10-12, 09:11 a/m
© Reuters.  LMEWEEK-Copper producer KGHM says not planning to suspend more operations
KGH
-
HG
-
GLEN
-

By Olivia Kumwenda-Mtambo
LONDON, Oct 12 (Reuters) - Polish copper miner KGHM KGH.WA
does not plan to suspend more production, put projects on hold
or sell assets as the industry battles sinking prices, its chief
executive told Reuters.
KGHM, Europe's No. 2 copper producer, put its McCreedy West
copper mine in Canada on "care and maintenance" - suspending but
not shutting down operations - last month as part of a
cost-cutting plan. urn:newsml:reuters.com:*:nWNAB08DSV
"At this point, we are not planning to put any more assets
on care and maintenance, we are not planning to sell any assets,
not planning to limit our investment spending and we are not
putting on hold any of our projects," said CEO Herbert Wirth.
"We don't want to survive, we want to develop."
Major miners including Glencore GLEN.L and U.S.-listed
Freeport FCX.N have also cut production as prices fall towards
levels where some operations are no longer economically viable.
urn:newsml:reuters.com:*:nL5N11R3U0
Copper prices have rebounded from six-year lows below $5,000
touched in August, helped partially by planned production cuts.
Benchmark three-month copper on the London Metal Exchange
CMCU3 was at $5,334.5 a tonne by 1200 GMT on Monday. MET/L
Wirth said he expected copper prices of between $5,000 and
$5,200 a tonne next year, with the state of the Chinese economy
and U.S. Federal Reserve's interest rates decisions expected to
remain key drivers of markets.
The CEO said a copper price of $5,000 per tonne was a "pain"
threshold for KGHM but that a weak Polish zloty was cushioning
the company from the fall in metal prices.
"We said in July that copper prices of $5,000 per tonne will
be critical for us and it's still true," said Wirth. The CEO had
also told Reuters in July that the firm may start making a loss
if prices fall to $4,400. urn:newsml:reuters.com:*:nL5N10B2HQ
"But we have most of our costs in zloty and we get the
income in dollars, so even though the copper price is low,
thanks to the weaker currency we are still very comfortable."
The zloty has weakened almost 5 percent this year against
the dollar, adding to a 17.3 percent slide in 2014.
KGHM's Polish assets account for 80 percent of its
production, with the remaining output from overseas assets in
Chile, United States and Canada.

(Editing by Pravin Char)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.