Xstrata Copper sees 1.5Mt/y in 2015
Xstrata Copper, the red metal division of Anglo-Swiss mining group Xstrata (LSE: XTA), expects copper production to grow 60% to roughly 1.5Mt/y by 2015 through six advanced projects, the division's CEO Charlie Sartain said Thursday.
"Now is the time to be starting to accelerate delivery of these projects, given the analysis of the market that we've undertaken and our confidence in the strength of the market in the mid to long term," Sartain said during a webcast investor seminar in London.
The six projects - five in Latin America and one in Australia - will add some 800,000t/y of new copper output, but the declining production profile at existing operations means a net impact of 550,000t/y, said the CEO.
"We see that starting to come through in 2011-12, but certainly picking up into 2013 and 2014."
The company's output in southern Peru alone is slated to increase from the current 100,000t/y to more than 600,000t/y in that timeframe, thanks to development of the Antapaccay deposit at the Tintaya mine, the Las Bambas greenfield project and an expansion at its 33.75%-owned Antamina.
Development approval at copper-zinc mine Antamina is expected by year-end, while decisions on Antapaccay and Las Bambas are scheduled for 2010, according to Sartain's presentation.
The company also plans to expand its 44%-owned Collahuasi mine in northern Chile, with a development decision planned for next year. A decision came in October on an expansion at Lomas Bayas, also in northern Chile. And on Thursday Xstrata Copper announced a positive decision to expand the Ernest Henry operation in Australia.
The projects "will consolidate the operating improvements that we've been working on for the last 3-4 years at a number of mines," Sartain said, adding that the plan is to reduce overall copper cash costs by 15% by end-2014.
Xstrata corporate has budgeted US$4.9bn in expansionary capital for 2010, with 30% going to copper projects, 28% to nickel projects, 37% to coal, 3% to zinc and 2% to alloys. Another US$1.9bn is planned in sustaining capital.
FUTURE GREENFIELDS
A series of earlier-stage greenfield projects could eventually add another 700,000t/y of copper production. The 200,000t/y El Pachón project in Argentina is still undergoing a feasibility update, though the company has said it requires greater certainty about the tax scheme the project would be subject to.
The earliest El Pachón could potentially be in production is 2016, according to Sartain's presentation.
Other greenfield endeavors are the 340,000t/y Tampakan project in the Philippines and the 190,000t/y Frieda River project in Papua New Guinea.
