HomeBase MetalsAustralia slashes copper production forecasts

Australia slashes copper production forecasts

The new autogenous
grinding mill at BHP
Billiton’s Olympic
Dam copper mine
Sydney, Australia — MININGREVIEW.COM — 15 December 2009 – Australia has slashed its forecasts for copper production and exports for fiscal 2010, blaming disruptions at BHP Billiton’s giant Olympic Dam mine for what would be the nation’s lowest output in a decade.

Production from the mine “’ the world’s fourth largest copper deposit “’ may drop by up to 70 000 tonnes before repairs to the main shaft are completed and full production resumes, according to the Australian Bureau of Agricultural and Resource Economics (ABARE). Its estimate of losses from the mine is up to 40% higher that most analysts’ forecasts, and represents more than a third of total capacity of around 200 000 tonnes a year.

In its latest quarterly outlook released here, ABARE cut its forecast for refined copper exports by 15.8% for the year to 30 June 2010, and its estimate for refined copper output by 13% to 408 000 tonnes.

“If realised, this will be the lowest refined copper production recorded in Australia since 1998-99,” it said.

The bureau also revised iron ore exports upwards by 2% and coking coal exports by 16.2 %, citing strong demand for raw materials by Asian steelmakers.

Chinese imports of coking and thermal coal and iron ore should remain strong into 2010, underpinning higher production from Australia mines as demand shows signs of picking up in other Australian export markets, according to the bureau.

Reuters reports that the iron ore export trade is a high stakes business worth more than US$80 billion (R600 billion) a year. It is dominated by Australians Rio Tinto and BHP along with Brazil’s Vale on the mining side and China, the world’s biggest iron ore consumer, on the other.

“China will continue to have a significant influence over the demand for minerals and energy commodities in 2010, but consumption is also forecast to increase gradually in OECD economies,” the bureau added.