The mine was closed in 1989 after it sparked a bloody civil war and its re-opening is still opposed by some members the rebel Me’ekamui group .

Bougainville President John Momis sees it as the way to give Bougainville the financial self-relaince it needs to make a real choice in a planned referendum on independence.

Landowners would have to approve any re-opening of Panguna, but at the moment they have no voice because there’s no organisation to represent them.

Australian National University lawyer, Anthony Regan, is working for the Bougainville Autonomous government, assisting landowners to set up their representative bodies.

Ledsham said while visiting Zambia, Africa’s largest copper producer, that the Konkola North project, Vale’s joint-venture project with African Rainbow Minerals was the first of other projects Vale planned to develop in Africa.

“Our goal is to start implementation of the project in September this year and begin production by 2013. The capital required is around $400-million which we will invest in two and half years,” Ledsham said during a business meeting in Lusaka.

“We (will be) starting with 50 000 t of copper per year before going to 100 000 t in the second phase when we expand the mine by 2015,” Ledsham said

Ledsham said the Konkola North underground mine would employ about 1 500 people once its development started.

He said Vale was also involved in exploration works and planned to invest in Nickel mining in Zambia after completing the copper mine.

Diversified South African miner African Rainbow said in May that it planned to divest from a gold project in Namibia by June and finalise the development of the Konkola copper project with Vale.

Copper mining is Zambia’s economic mainstay and the mines are a major employer in this southern African country of 12-million people.

Foreign mining companies in Zambia include London-listed Vedanta Resources, Canada’s First Quantum Minerals, Glencore International of Switzerland and Metorex of South Africa.

Fluor said on Tuesday it would handle the engineering and construction on the new Caserones copper mine for Minera Lumina Copper Chile, which is backed by Pan Pacific Copper Co Ltd and Mitsui & Co Ltd.

“South America, and Chile in particular, continues to be a robust market for our company in the mining sector,” Dwayne Wilson, Fluor’s group president for industrial business, said in a statement.

The $1,3-billion will be added to Fluor’s backlog for the second quarter, which it said last month could top $30-billion after falling to $25,7-billion at the end of the first quarter, as new awards could exceed its single-quarter record of $8,8-billion.

Fluor has said that the profitability of this bigger backlog would be relatively weaker because mining work tends to yield a lower margin than oil and gas projects.

Work on the Caserones projects will be done at 4 000 m above sea level, and the project has a marketable output of 3,6-million tons of fine copper and 87 kilotons of molybdenum, Fluor said.

When Minera Lumina signed off on the plans in February, with copper prices having more than doubled from a year before, the project was due to be completed by 2013, according to a statement on Mitsui’s website.

Pan Pacific is 66 percent owned by Nippon Mining & Metals, part of Nippon Mining Holdings Inc, while the remainder is held by Mitsui Mining and Smelting Co Ltd.

Shares of Irving, Texas-based Fluor were down 3% on Tuesday, in line with the sector as crude oil prices tumbled.

A MCC majority-owned lead and zinc mine in Pakistan produced about 13,000 tonnes of zinc concentrates in the first half of the year and the material was sold to China, Zeng said, adding the firm had not sold lead concentrates due to small amounts.
The mine started production at the end of last year and has a designed capacity of about 70,000 tonnes of zinc in concentrate a year, he said.
MCC also operates a copper mine in Pakistan with annual production of 18,000 tonnes of copper, 2 tonnes of gold and 3 tonnes of silver, Zeng said.
A 10-year lease for the operation of the mine will expire in 2012 and MCC is in talks with the local government for an extension, he said.
Zeng said the lead and zinc unit was seeking to invest and develop overseas metals mining projects for MCC.
"We focus on the development of projects, not exploration as that takes 10 to 20 years and we don't have the time," he said, adding Beijing encouraged the firm to invest in overseas projects.

Surprisingly strong U.S. housing data for April drove
optimism about the economy, boosting stocks and driving up oil
prices.

The stock rally — a 2.3 percent rise for the Dow Jones
Industrial Average .DJI — also eased concerns that Europe’s
sovereign debt crisis could restrain a fragile economic
recovery.

“Investors are waking up to the positive story coming from
the United States. Shocks from Europe could knock us back
again, but ahead of the payrolls numbers, I think these markets
will be firm,” a trader in Hong Kong said.

Friday will see the release of U.S. non-farm payrolls for
June, viewed by many as the key gauge of the nation’s economic
recovery, with the market looking for an increase in excess of
500,000.

Three-month copper on the London Metal Exchange CMCU3
rallied $65 to $6,730 by 0336 GMT, and earlier touched $6,760,
reversing the previous day’s loss.

“I don’t see a strong rebound. Sentiment is cautious after
the correction in the past few weeks,” Barclays Capital analyst
Yingxi Yu said.

“Metals are still being weighed down by concerns about
China — those are probably more important than the crisis in
Europe, but growing uncertainty about the global economy may
delay Chinese efforts to slow growth and that may be positive”

On the supply side, copper’s longer term outlook saw a
boost after global miner Xstrata (XTA.L: Quote) said it has suspended
almost A$1.2 billion ($1 billion) in coal and copper mining
projects in Australia, blaming Canberra’s new mining tax.

Xstrata, which last month halted some copper exploration in
the country’s north, said on Thursday it was now suspending a
A$600 million project to expand its Ernest Henry copper mine.

Benchmark third-month Shanghai copper SCFc3 rose 560 yuan
to 53,960 yuan, but zinc SZNc3 extended losses from the
previous session, when the market hit its downside limit, to
fall 0.6 percent to 15,115 yuan.

LME aluminium CMAL3 rose 0.8 percent to $2,000 a tonne,
but technicals pointed to a slightly weaker market, targeting
$1,920 for as long as the market holds below $2,025.
[TECH/C-MET]
Base metals prices at 0336 GMT
Metal Last Change Pct Move End 2009 YTD pct
chg
LME Cu 6730.00 65.00 +0.98 7375.00
-8.75
SHFE Cu* 53960.00 560.00 +1.05 59900.00
-9.92
LME Alum 2000.00 15.00 +0.76 2230.00
-10.31
SHFE Alum* 14955.00 20.00 +0.13 17160.00
-12.85
COMEX Cu** 304.75 1.55 +0.51 332.75
-8.41
LME Zinc 1827.00 26.00 +1.44 2560.00
-28.63
SHFE Zinc 15115.00 -95.00 -0.62 21195.00
-28.69
LME Nickel 20050.00 400.00 +2.04 18525.00
8.23
LME Lead 1725.00 29.00 +1.71 2432.00
-29.07
LME Tin 17675.00 25.00 +0.14 16950.00
4.28
LME/Shanghai arb^ -181
Dollar/yuan 6.8298 \ 6.8303
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month

* Grupo Mexico quiet on next move over strike

* Strike divides town with history of labor strife

By Mica Rosenberg

CANANEA, Mexico, Feb 18  - Dozens of miners are blockading Mexico’s biggest copper mine day and night, dimming hopes that owner Grupo Mexico can quickly reopen it despite a court ruling that a 2-1/2 year strike is illegal.

On the edge of the mine overlooking the northern Mexican town of Cananea, nine 10-meter (33 feet) tall rock haulers stand in a row, their 300-tonne capacity truck beds empty.

Behind the picket line, conveyor belts, diggers as big as houses and huge rock crushers rooted deep into the ground are dusty and silent. In a dank warehouse housing the main crusher, a stalagmite has formed from dripping water and minerals.

A court ruled last week that Cananea, which used to produce 40 percent of Mexico’s copper, is in force majeure due to damage from the strike, meaning Grupo Mexico (GMEXICOB.MX) can cancel contracts, hire new staff and resume production.

But miners are refusing to relinquish control of Cananea, a symbol of Mexico’s labor movement since a clash here more than a century ago set the stage for the country’s revolution.

Clinging to several prior court decisions during a long back-and-forth of appeals that ruled the strike is legal, they are turning away work-seeking contract miners arriving from other states, lured by talk that the mine might reopen.

“We are prepared to give our lives (for this struggle),” said Juan Alvidrez, a Cananea worker for more than 20 years, and one of dozens of striking workers who have occupied the mine in the northern state of Sonora since July 2007.

Grupo Mexico — which estimates its losses to date from the Cananea strike at more than $1.5 billion — says it could cost $100 million to restore equipment stolen by the miners or ruined from disuse. The miners deny any wrongdoing, however.

“I am not going to destroy something that I depend on for my livelihood,” miner Armando Moreno said at Cananea, where a building housing the huge cylindrical mills that pulverize rocks to extract copper still hums with electricity.

The union wants better safety conditions and back wages paid to cover the strike period. It says that with a clean-up and maintenance, Cananea could be up and running in a matter of months and back to producing 150,000 tonnes of copper a year.

Grupo Mexico hopes many striking miners might return to work under new contracts and has set aside money to pay liquidations. It will not say when Cananea could reopen, although analysts are eyeing the third quarter of 2010.

“We call on everyone involved to follow the law (and respect the court decision),” said Juan Rebolledo, a Grupo Mexico vice president. “Now it is the responsibility of the authorities to make sure the rule of law is applied,” he said.

DIVIDED TOWN

The Cananea mine has been the town’s lifeblood since the late 1800s. When news came of last week’s court ruling, workers and their families rushed to the site fearing a clash with federal police, as happened in 2008 when a legal decision favored Grupo Mexico and miners fought with rocks and sticks.

The striking miners, who walked out complaining of unsafe conditions, say they are part of a historical labor movement in Cananea, where in 1906 workers confronted the mine’s then American owner demanding better pay and hours.

Armed men called in to defend the property killed 19 miners in a battle that set the tone for Mexico’s revolution.

“They want to crush us, the same as 100 years ago,” said union leader Jesus Verdugo, whose father, grandfather and great-grandfather all worked at the sprawling pit cut into the desert mountains near the border with Arizona.

Around 1,300 miners initially joined the Cananea strike, and the few hundred others, mainly non-unionized contract workers, were left unemployed as the mine shut down. Since then around 250 strikers have accepted buyouts, unconvinced union leader Napoleon Gomez is protecting their best interests.

Gomez has led numerous strikes and won a $30,000 bonus for workers for high copper prices in 2006. But he fled to Canada to avoid arrest on corruption charges and now runs the union from exile. Some union sections, fed up with the feud, have broken away to form more company-friendly labor organizations.

Grupo Mexico hopes it can reopen Cananea and rehire workers such as Guillermo Garcia, a high-voltage electrician at Cananea for eight years, who accepted a liquidation offer in 2008.

“I never agreed with the strike and when I went to the mine to work I got beaten up,” said Garcia, 32. “Even without the same contract, it’s better working there than any other place.”

The mine remains as divisive as ever for the town of Cananea. Union workers snub relatives who took buyouts and the children of Gomez supporters and “scabs” scrap in schoolyards.

Maria Rosa Guayante, married to a miner and now scraping by on cash handouts and side jobs, says the uncertainty is an economic headache.

* Grupo Mexico quiet on next move over strike

* Strike divides town with history of labor strife

By Mica Rosenberg

CANANEA, Mexico, Feb 18  - Dozens of miners are blockading Mexico’s biggest copper mine day and night, dimming hopes that owner Grupo Mexico can quickly reopen it despite a court ruling that a 2-1/2 year strike is illegal.

On the edge of the mine overlooking the northern Mexican town of Cananea, nine 10-meter (33 feet) tall rock haulers stand in a row, their 300-tonne capacity truck beds empty.

Behind the picket line, conveyor belts, diggers as big as houses and huge rock crushers rooted deep into the ground are dusty and silent. In a dank warehouse housing the main crusher, a stalagmite has formed from dripping water and minerals.

A court ruled last week that Cananea, which used to produce 40 percent of Mexico’s copper, is in force majeure due to damage from the strike, meaning Grupo Mexico (GMEXICOB.MX) can cancel contracts, hire new staff and resume production.

But miners are refusing to relinquish control of Cananea, a symbol of Mexico’s labor movement since a clash here more than a century ago set the stage for the country’s revolution.

Clinging to several prior court decisions during a long back-and-forth of appeals that ruled the strike is legal, they are turning away work-seeking contract miners arriving from other states, lured by talk that the mine might reopen.

“We are prepared to give our lives (for this struggle),” said Juan Alvidrez, a Cananea worker for more than 20 years, and one of dozens of striking workers who have occupied the mine in the northern state of Sonora since July 2007.

Grupo Mexico — which estimates its losses to date from the Cananea strike at more than $1.5 billion — says it could cost $100 million to restore equipment stolen by the miners or ruined from disuse. The miners deny any wrongdoing, however.

“I am not going to destroy something that I depend on for my livelihood,” miner Armando Moreno said at Cananea, where a building housing the huge cylindrical mills that pulverize rocks to extract copper still hums with electricity.

The union wants better safety conditions and back wages paid to cover the strike period. It says that with a clean-up and maintenance, Cananea could be up and running in a matter of months and back to producing 150,000 tonnes of copper a year.

Grupo Mexico hopes many striking miners might return to work under new contracts and has set aside money to pay liquidations. It will not say when Cananea could reopen, although analysts are eyeing the third quarter of 2010.

“We call on everyone involved to follow the law (and respect the court decision),” said Juan Rebolledo, a Grupo Mexico vice president. “Now it is the responsibility of the authorities to make sure the rule of law is applied,” he said.

DIVIDED TOWN

The Cananea mine has been the town’s lifeblood since the late 1800s. When news came of last week’s court ruling, workers and their families rushed to the site fearing a clash with federal police, as happened in 2008 when a legal decision favored Grupo Mexico and miners fought with rocks and sticks.

The striking miners, who walked out complaining of unsafe conditions, say they are part of a historical labor movement in Cananea, where in 1906 workers confronted the mine’s then American owner demanding better pay and hours.

Armed men called in to defend the property killed 19 miners in a battle that set the tone for Mexico’s revolution.

“They want to crush us, the same as 100 years ago,” said union leader Jesus Verdugo, whose father, grandfather and great-grandfather all worked at the sprawling pit cut into the desert mountains near the border with Arizona.

Around 1,300 miners initially joined the Cananea strike, and the few hundred others, mainly non-unionized contract workers, were left unemployed as the mine shut down. Since then around 250 strikers have accepted buyouts, unconvinced union leader Napoleon Gomez is protecting their best interests.

Gomez has led numerous strikes and won a $30,000 bonus for workers for high copper prices in 2006. But he fled to Canada to avoid arrest on corruption charges and now runs the union from exile. Some union sections, fed up with the feud, have broken away to form more company-friendly labor organizations.

Grupo Mexico hopes it can reopen Cananea and rehire workers such as Guillermo Garcia, a high-voltage electrician at Cananea for eight years, who accepted a liquidation offer in 2008.

“I never agreed with the strike and when I went to the mine to work I got beaten up,” said Garcia, 32. “Even without the same contract, it’s better working there than any other place.”

The mine remains as divisive as ever for the town of Cananea. Union workers snub relatives who took buyouts and the children of Gomez supporters and “scabs” scrap in schoolyards.

Maria Rosa Guayante, married to a miner and now scraping by on cash handouts and side jobs, says the uncertainty is an economic headache.

The workers are holding two-hour strikes at the beginning of each shift, after demands for a 17% increase in their base salary was rejected by management.

The company said it is still assessing how much production will be lost and will work to reduce the effect of the strikes.

In the meantime, management plans to continue concentrate production using run of mine ore and on-surface stockpiles, Lundin said.

“We are disappointed with the action by a section of our employees who were last month granted increases well in excess of inflation and well above the national average,” COO Joao Carrelo said in a statement.

“Our employees already earn more than double the national average salary with a full suite of benefits and we have in recent years granted extraordinary bonuses in recognition of high metal prices.”

Lundin has mines in Portugal, Sweden and Spain, as well as a 24,75% stake in Freeport-McMoRan Copper & Gold’s Tenke Fungurume copper/cobalt project, in the Democratic Republic of Congo.

The company’s environmental impact study has been approved, which now paves the way to increase extraction by 20% to 260,000t per day compared to the earlier 220,000t a day at the copper mine, according to Reuters.

The company said the investment will be focused on revamping processing lines and increasing the logistics units.

The mine on average produces 125,000t of copper per annum, with a major portion being produced in the form of cathodes.

Barrick is also in the process of developing its Pascua-Lama gold-silver mine on the Argentina-Chile border.

As production ramps up, for the months of December 2009 and January 2010, Surda mine set several new production records. For the month of January, Surda Mine hoisted 36,973 tonnes and tramming for the same month was 39,404 tonnes, which set new records.

For the month of January, the Surda Mine produced over 305 tonnes of metal-in-concentrate for delivery to Hindustan Copper Limited’s (HCL’s) nearby smelter.

IRL Managing Director, Arvind Misra, said that it is a significant step for IRL to grow the business in the 2010 year which began with the signing of a coal mine development Letter of Intent with Bankura DRI.

The increase in broken tonnage capacity, was achieved by to efficiency improvements, will be further enhanced by the addition of new higher grade areas on the lower northern end of the mine.

The impact of mining in higher grade areas and ongoing production efficiency improvements are expected enable the Surda Mine to achieve a targeted production level of 340 tonnes metal in concentrate per month.

The Surda Copper Project is owned by Hindustan Copper Limited (HCL) and now operated by India Resources Limited in the state of Jharkhand.

The mine is one of several older mines on the Singhbhum Copper Belt which have hundred’s of years of mining history but were progressively abandoned due to low copper prices between 1998 and 2004.

IRL started refurbishing the mine and the concentrator plant at the abandoned Mosaboni site in July 2007. Production is now at record levels due to the efficiencies and techniques brought to the project by the Australian operators as well as the local experience and knowledge.

Cash flows from the Surda Mine and other proposed facilities available to IRL will contribute to the funding for the development of the Bankura coal project and other exploration projects.

“These factors are expected to start a reversal of the upward trend in inventories over the coming months,” the company said in its financial results.

Grupo forecast that its Mining Division (which now includes U.S. copper miner Asarco) is expected to produce 720,000 tons of copper this year without including any production from Mexico’s Cananea copper mine, which remains closed because of a lengthy labor dispute.

Copper production for 2008 was 496,022 metric tons, a 1.5% increase over 2008 production. “This increase is the result of our strict operating focus and improved ore grades at La Caridad [in Mexico] and [Peru's] Toquepala mines,” the company said in its financial results release.

GMexico said, “The outlook for molybdenum is equally positive, and this metal will start trading on the London Metals Exchange in (LME) in February.”

The company reported a 14% increase in moly production last year for a total of 18,687 metric tons. Zinc production increased 3.3% in 2009 to 110,430 tons. The increase was due principally to improved ore grades at La Caridad and improved grade and recovery at Cuajone in Peru, according to Grupo.

Last year’s silver production increased 8.2% to 13.3 million ounces of silver while gold production was reported at 15,088 ounces, a slight increase over 2008.

ASARCO

Meanwhile, Grupo Mexico’s hard-fought reacquisition of U.S. copper miner Asarco will generate tax benefits of US$1.024 billion for Grupo, which will be realized beginning the second quarter of this year.

Asarco is the third largest copper producer in the U.S. and has reserves of 5 million tons of copper concentrate, representing 30 years of mine life, according to its parent.

“With the integration of Asarco, GMexico positions itself as the number one company in copper reserves worldwide,” the company claimed, “ahead of Codelco and Freeport, and reaffirms its position as one of the main producers of mined and refined copper.”

Asarco contributed 10,646 tons of copper, 122,068 ounces of silver and 24,405 tons of sulfuric acid as GMexico had only consolidated the Asarco operation for 22 days beginning December 10, 2009.

Grupo said it contributed $705 million in cash and secured financing of $1.5 billion to capitalize Asarco in the amount of $2.2 billion. Asarco contributed $1.357 billion from its own cash and made payment to its credits for an aggregate cash consideration of $3.562 billion.

In addition a one-year promissory note of $280 million was delivered to Asarco’s asbestos creditors.

CAPEX PROGRAM

On January 29th, Grupo’s board of directors also approved a $3.9 billion capex program for the next three years. Of that, $2.95 billion will be invested in the Mining Division, $576 million in the Transportation Division, and $384 million in the Infrastructure Division.

The board approved a $2.8 billion capex program for Southern Copper Corporation (SCC) including $1.8 billion to increase SCC’s annual copper production by 120,000 metric tons by the end of 2011 with the completion of the Peruvian Tia Maria project. The capex program will also expand the Toquepala mine in Peru, which will increase annual production by 100,000 metric tons of copper and 3,100 metric tons of moly by 2012. The Cuajone mine will be modernized and expanded to increase annual copper production by 72,000 metric tons of copper.

The board also voted to invest $1 billion in Mexico “if and when the company has been provided with the necessary labor and judicial conditions required for such an investment.”

The budget includes the expansion of production at the La Caridad mine by 50,000 metric tons of copper and 3,000 tons of moly annually. The program also includes the construction of a power plant “resulting in significant savings of approximately 50% of our current costs.”

The three-year investment program could include an additional $3.85 billion of investment in Mexico, which would be directed towards projects at the Cananea mine and the development of the Greenfield copper and gold deposit of El Arco in Baja California.

“These incremental investments would result in an additional 490,000 tons of copper production per year to the previously mentioned 342,000 tons,” the company said. “This investment is suspended until the company is provided with the labor conditions and the availability of competitive energy rates that are required to undertake these projects.”

The capex investments programmed for Asarco over the next three years are $150 million.

FINANCIALS

GMexico reported net consolidated earnings of $887 million or 11-cents per share for 2009, down $189 million or 17.6% from 2008 which reported net earnings of $1.076 billion or 14-cents/sh.

For the fourth-quarter 2009, Grupo reported net income of $342.05 million or 4-cents/sh, up 297.5% from a loss of $173.2 million or negative 2-cents/sh reported during the fourth quarter of 2008.

“At no time did UK institutions fail to pay,” said Mirabaud’s Peter Krens in an email to City Beat.

Patersons head of corporate finance Aaron Constantine said Patersons’ 75 per cent of the first IPO was over-subscribed.
Q Copper was expected to list on February 15 after Cape Lambert shareholders late last month approved the IPO, which would have disposed of the Lady Annie copper mine the miner had acquired for about $40m from the failed CopperCo in May 2009.

The non-underwritten IPO, which was priced at $1, closed yesterday and was managed by Patersons.

Cape Lambert said it would now proceed with its planned exploration program at Lady Annie, with the first drill rig to arrive on February 24.

The failure follows Macquarie’s cancellation of the $196m float of Talison Lithium in December 2009 and Morgan Stanley’s aborted $1 billion float of its Investa property trust in November 2009.

Cbio also delayed its IPO in December 2009 and revised down the minimum target to $7m from $13m.

UK broker Mirabaud Securities, which acted as the UK placing agent on the Q Copper IPO, has denied it was British institutions that caused the first delay to the float.

But Cape Lambert said this morning it would withdraw the IPO until volatility in stock markets and commodity prices improved.

Shares in Cape Lambert were dumped on the news, falling more than 10 per cent to 45 cents in early trade.

Cape Lambert chief Tony Sage said: “Whilst we are disappointed with the deterioration of the market in recent weeks, and its impact on the IPO, Lady Annie remains a very good copper project.”

The IPO had been scheduled to become the biggest resources float of 2009 before it was delayed and revised down from $214m in December, after about 25 per cent of investors failed to meet their settlement obligations.

But Cape Lambert said this morning it would withdraw the IPO until volatility in stock markets and commodity prices improved.

Shares in Cape Lambert were dumped on the news, falling more than 10 per cent to 45 cents in early trade.

Cape Lambert chief Tony Sage said: “Whilst we are disappointed with the deterioration of the market in recent weeks, and its impact on the IPO, Lady Annie remains a very good copper project.”

Q Copper was expected to list on February 15 after Cape Lambert shareholders late last month approved the IPO, which would have disposed of the Lady Annie copper mine the miner had acquired for about $40m from the failed CopperCo in May 2009.

The non-underwritten IPO, which was priced at $1, closed yesterday and was managed by Patersons.

Cape Lambert said it would now proceed with its planned exploration program at Lady Annie, with the first drill rig to arrive on February 24.

The failure follows Macquarie’s cancellation of the $196m float of Talison Lithium in December 2009 and Morgan Stanley’s aborted $1 billion float of its Investa property trust in November 2009.

Cbio also delayed its IPO in December 2009 and revised down the minimum target to $7m from $13m.

UK broker Mirabaud Securities, which acted as the UK placing agent on the Q Copper IPO, has denied it was British institutions that caused the first delay to the float.

“At no time did UK institutions fail to pay,” said Mirabaud’s Peter Krens in an email to City Beat.

Patersons head of corporate finance Aaron Constantine said Patersons’ 75 per cent of the first IPO was over-subscribed.

ARM was also looking at acquisitions in the rest of the continent and had formed a joint venture with Vale to explore for copper in Zambia, while also looking at the Democratic Republic of Congo, Namibia and Mozambique.

“We are certainly on track for the first phase and the second phase (expansion) and see full production at the end of the year 2012, from 10-million tons per annum to 16 [mtpa],” CEO Andre Wilkens told Reuters on the sidelines of an African mining conference.

Wilkens said his board would consider the Konkola North copper mine project later this year before announcing its terms, although it looked viable at this stage.

“The long-term copper price looks much stronger now than 18 months ago so it certainly makes that project viable,” he said.

ARM produces platinum, nickel, iron ore, manganese ore and coal, among others.

Wilken said the company intended to spend around R8-billion over the next two years, including this financial year, as it ramped up production and sought to make acquisitions in the rest of the continent.

“We are looking specifically at platinum in Zimbabwe to see what we can achieve there,” he said.

Zimbabwe, which has large undeveloped platinum reserves, is struggling to boost investments in its mining sector following years of neglect prompted by political violence and an economic collapse in the southern African nation.

Its indigenisation process, which aims at nationalising mines, has also caused consternation among investors and large mining companies, with Rio Tinto on Tuesday saying this remained a concern.

But Wilkens said ARM would invest in Zimbabwe if it made business sense.

“If we are able to get the license or the ownership of a sizeable ore body that makes a good business case we will go there,” he added.

The Agreement was ratified by the Union membership on Tuesday evening, after negotiations that began in mid December.

Highlights of the Agreement include an annual cost of living allowance with a 20-cent hourly wage increase in the third year, C$2,500 Continuity Allowance, a new nickel bonus formula that reflects current business realities, competitive pension and benefit improvements that adjust for inflation, and a new employee performance-based incentive program linked to the achievement of business targets. The Agreement also provides a framework for a new joint Company-Union initiative aimed at mitigating longer term challenges with the current Defined Benefit Pension Program.

In addition, Xstrata Nickel plans to reactivate copper mining at the Fraser Mine in February 2010 and the accord provides for a workforce transition agreement that enables the recall of 100 workers to fill vacant positions, while minimizing any impact on the existing Nickel Rim South workforce as this project ramps up to full production in the second quarter of this year.

“We are very pleased our employees have supported the Agreement and shown that they are committed to the success of Xstrata Nickel’s Sudbury Operations,” said Marc Boissonneault, Vice-President, Sudbury Operations. “Together, we can move forward to successfully transition Nickel Rim South to full operation, ramp up production at our Fraser Copper Mine and pursue performance enhancements at our Strathcona Mill and Sudbury Smelter, positioning our Sudbury Operations for success for the longer term.”

Editors Notes

Xstrata plc

Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. Xstrata’s businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with a growing platinum group metals business, additional exposures to gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group’s operations and projects span 19 countries.

Xstrata Nickel

Xstrata Nickel, headquartered in Toronto, Canada, is one of Xstrata Group’s global commodity businesses. Xstrata Nickel’s operations include mines and processing facilities in Canada, the Dominican Republic and Australia, and a refinery in Norway. Xstrata Nickel has a promising portfolio of growth projects in Canada, New Caledonia, Tanzania and Brazil. Xstrata Nickel is the world’s fifth largest nickel producer, with annual managed production of more than 107,000 tonnes of refined nickel.

Xstrata Nickel’s Sudbury Operations

Xstrata Nickel’s Sudbury Operations consist of the Nickel Rim South project, a mill and a smelter. The facilities are spread throughout the 60 kilometre, oval-shaped geological formation known as the Sudbury Basin. Nickel and copper are the primary metals but cobalt and precious metals such as platinum are also produced.

ICSG forecasts copper in concentrate capacity to increase by 2.7 million tons, or 4.3%, a year to reach 17.9 million tons.

Most of the new mine projects and expansions are in Brazil, Chile, Congo, Mongolia, Peru, the U.S. and Zambia, which together account for around 73%, or 2.6 million tons, of the projected increase in mine capacity for the period, ICSG said.

ICSG forecasts annual smelter capacity to grow by an average of 2.6% a year to reach 20.2 million tons in 2013, an increase of 2 million tons, or 11%, from 2009 capacity.

Asia will be the leading contributor to growth, accounting for 1.8 million tons, with expansion and new projects expected mostly in China. India, Indonesia and Iran will also contribute to new smelter capacity.

Africa is the second leading contributor owing to developments in Zambia while North American smelting capacity will fall by 12%, or 250,000 tons, due to closures of plants in Canada.

World copper refinery capacity will reach 26.6 million tons in 2013, an increase of 3.2 million tons, or 13%, from 2009, ICSG forecasts.

About a half, or 1.5 million tons, of the world refinery capacity increase during this period will come from electrolytic refineries in China; about 25%, or 830,000 tons, from electrolytic capacity increases in India, Indonesia and Iran; and about 20%, or 600,000 tons, from electrowinning capacity increases in Congo, Peru and Zambia, the ICSG said.

* Plans to dispose of all non-core operations

(Adds details)

JOHANNESBURG, Jan 29 (Reuters) – South African miner Metorex Ltd (MTXJ.J: Quote) said on Friday it had embarked on a $100 million capital raising programme and revised a debt package for its Ruashi copper mine in the Democratic Republic of Congo (DRC).

Terence Goodlace, chief executive of Metorex, which has a copper unit in Zambia, said the debt raising programme would significantly strengthen the company’s balance sheet and set the scene for new project development and value creation.

“We are pleased to have secured upfront subscription commitments and undertakings in excess of 80 percent of our capital raising target amount. Our new focus will be on sustainable growth and expansion, whilst maintaining strict operational, financial and technical standards.,” Goodlace said in a statement.

Metorex said its potential development projects included the central African Copperbelt deposits at Musonoi and the Kisenda and Lubembe projects in the Congo.

The company said the new capital would enable it to dispose of or to put on care and maintenance the non-profitable and cash consuming consolidated Murchison division, which was the only remaining non-core operation within the Metorex portfolio, fafter the disposal of the groups’ non-core assets in 2009.

Metorex said the Ruashi debt balance was recently reduced to $135 million from $185 million following the application of a $50 million raised from the disposal of its 55 percent stake in the flourspar producer Vegenoeg Mining Co. in South Africa. (Reporting by Shapi Shacinda)

On July 11, the more than 3,000 employees at Vale Inco’s mill, smelter, refinery and six nickel mines in the Sudbury area of northern Ontario voted to go on strike along with their counterparts at Vale’s Port Colborne refinery and its nickel-cobalt-copper mine in Voisey’s Bay, N.L.

A half-year later, the bargaining table sits gathering dust and both sides are staunchly refusing to resume talks until their opponent shows some willingness to bend. Not surprisingly, the company blames the United Steelworkers for the lack of headway, and the union blames the company.

“Vale’s position says, ‘We’re always ready to go back provided the union accepts all our conditions and concessions,’ and that’s just not collective bargaining. That’s holding a gun to someone’s head,” said Ken Neumann, the Steelworkers’ national director for Canada.

The Steelworkers have long held the position that they’re willing to resume negotiations if the company will come back to the table with no preconditions. As far as Vale is concerned, however, asking for no preconditions is a condition in and of itself.

“From our perspective we haven’t seen any serious indications from the Steelworkers that they’re prepared to negotiate,” said Vale spokesman Cory McPhee.

“… They’re saying, ‘Well, we’ll go back with no conditions, but we have to have no concessions,’ so you follow up a statement that says you have to have no conditions by setting a condition.”

The increasingly bitter dispute centres on two main issues: Vale’s proposal to reduce a bonus tied to the price of nickel, as well as a plan by the company to exempt new employees from its defined-benefit pension plan, moving them instead to a defined-contribution plan.

The union says Vale is a profitable multinational corporation that’s trying to bring its Canadian workers down to the “lowest common denominator” of its global operations by slashing benefits.

“In the third quarter of this year alone they’ve got profits of US$1.7 billion, so we’re not talking about someone that’s coming with their hand out and saying, ‘We’re in deep trouble.’ That’s the furthest thing from the truth,” Neumann said.

But Vale chief executive Roger Agnelli warned before the strike began that Sudbury is the company’s highest-cost operation and wasn’t sustainable at current price levels. Additionally, although the price of nickel has nearly doubled from its low of around US$4 a pound a year ago, it’s still a long way from the $15 level it reached before the recession set in.

“It’s really about putting in place a long-term business platform that allows us to be competitive in all price cycles,” McPhee said.

“The inventories on the London Metal Exchange for nickel are approaching record highs, and there are still producers who idled capacity during the economic downturn that could potentially bring that capacity back online. The nickel market is a very competitive market and we want to be the leader in the market, so we have to position ourselves to do so,” he added.

This is the first strike at the former Inco’s Sudbury operations since Vale bought the company for $19 billion in 2006. Earlier work stoppages at Inco have been lengthy, including a nine-month strike in 1978 and a three-month strike in 2003.

The difficulty with such lengthy strikes is that they only tend to get resolved if one side gives in, and this fact can push both sides to dig in their heels for as long as they can, said Alan Hall, director of labour studies at the University of Windsor.

“When it gets this long, it’s really a question of who’s going to give up first and give up in a major way,” Hall said.

The Steelworkers have plenty of experience surviving long, painful strikes, and it helps that workers have “a fairly large, fairly strong international union behind them,” Hall said.

The union has been ramping up its pressure tactics both locally and internationally in the past few months, and Neumann has even flown to Brazil to meet with politicians there in the hopes they’ll put pressure on the company to end the strike.

From Vale’s perspective, global demand for the nickel mined and processed at its Canadian operations is still relatively weak due to the recession, so there’s not much incentive from a profit perspective to resolve the strike, Hall said.

The longer the strike lasts, the more damage will be done to labour relations, particularly if one side feels like it lost the battle.

“If one side really does feel like it’s being humiliated, it certainly does make for a difficult return to normal relations,” Hall said.

John Fera, president of Steelworkers Local 6500 representing striking workers in Sudbury, said Inco workers never forgot the prolonged strike of 1978 and the outcome of this dispute could be similar.

“I think the relationship going forward between Vale Inco and its workers is going to be pretty strained, and it’s going to take a lot of hard work and a lot of understanding and co-operation to one day get the company and (its employees) to work well together,” Fera said. “I think it’s going to be an uphill battle.”

In the meantime, there’s no doubt that workers and the communities in which they live are suffering from the work stoppage. Donn-Marr Welding Supplies in Sudbury was forced to close its doors after 31 years due to the strike, and several other suppliers and transportation companies that depend on Vale are struggling with a dramatic reduction in their business.

“We’re really entrenched in the community here because it’s where we live, work and play. The bonuses and all those sorts of things get spent in the businesses here,” said Alex Patterson, a mill operator at Vale’s Sudbury operations.

Meanwhile, the union says its resolve isn’t flagging.

“Our people are very, very strong in their resolve,” Fera said. “We’re not giving back stuff that we fought for for so many years, but we are willing to negotiate to see what kind of discussion that brings.”

“One day longer and one day stronger — that’s our motto.”

 FUNDAMENTALS

 * Three-month copper on the London Metal Exchange MCU3
rose $125 to close at $7,500 a tonne on Monday, and edged
higher to $7,506 in after-hour trading.

 * When Shanghai closed on Monday, LME copper stood at
$7,430 a tonne.

 * Investors were encouraged by upbeat U.S. manufacturing
sector data released on Monday, which showed the sector grew at
its fastest pace in nearly four years in December, its fifth
consecutive month of expansion. [ID:nN04237488]

 * But headwinds remain, as a separate report showed
construction spending in November fell to a more than six-year
low, dragged by a sharp decline in homebuilding.

 * In Chile, Codelco made an improved wage offer to workers
at its huge Chiquicamata copper mine in a bid to defuse a
day-old strike that had helped boost global copper prices.
[ID:nN04228293]

 * The five-month strike at Brazilian miner Vale's
(VALE5.SA: Quote) Voisey's Bay nickel mine in Canada is nowhere near
an end, as the mediated talks between Vale and union leaders
failed to bring the two sides back to the bargaining table.
[ID:nN04196713]

 * LME's nickel stocks rose 414 tonnes to a new all-time
high at 158,424 tonnes on Monday.

 MARKET NEWS

 * U.S. stocks climbed broadly on Monday after an upbeat
U.S. manufacturing sector data, lifting confidence in the
global economy as investors eye fourth-quarter earnings.
[ID:nN04247972]

 *  The U.S. dollar weakened as optimism about a global
economic recovery encouraged investors to seek riskier
investments such as stocks and commodities at the expense of
the greenback. [USD/]

 DATA/EVENTS

 * The following data is expected on Tuesday:

 - France consumer confidence                      (0745
GMT)

 - Germany unemployment rate, total                (0900
GMT)

 - Euro zone Consumer Prices Index (CPI) for Dec   (1000
GMT)

 - ICSC/Goldman Sachs weekly U.S. chain store sales(1245
GMT)

 - Canada producer prices, raw material prices     (1330
GMT)

 - Redbook weekly U.S. retail sales                (1355
GMT)

 - U.S. factory orders for November                (1500
GMT)

 - U.S. pending home sales, November               (1500
GMT)

 - U.S. auto sales

 RELATED NEWS
 > METALS-Copper rallies to 16-mth top on demand prospects
[ID:nLDE6030L4]
 > Chile Codelco makes offer to defuse Chuqui strike
[ID:nN04228293]
 > Vale, union say won't restart Voisey's Bay talks
[ID:nN04196713]
 > Venezuela may shut metal output to save power-paper
[ID:nN04240130]
 > Chalco raised alumina prices 5.7 pct on Dec 31
[ID:nTOE60308U]
 > FACTBOX-Chile's Codelco copper output since
2000[ID:nN04233919]

Codelco, as the miner is known, has said it has enough copper inventories to meet its January copper deliveries.

State-owned Codelco said it was considering whether to seek five days of government mediation to head off a strike, and would use “all appropriate mechanisms”.

A strike could curb production by 1,800 tonnes a day. Copper prices rose 3pc to a 15-month high in London on supply fears, but slipped later in New York on other factors.

Union leaders at the mine had expected workers to accept Codelco’s wage offer, and said the ballot to reject the deal was close, with just a few dozen votes tipping the balance

Some workers scuffled with union officials afterwards, spraying water and chanting “Together, Chuqui will never be conquered”.

A strike would be the most serious by Codelco’s unionised workers since 1996.

President Michelle Bachelet, whose government has relied heavily on billions of dollars in windfall copper savings to fund fiscal stimulus to counter the impact of global financial crisis and Chile’s first recession in a decade, appealed to workers to reconsider.

A group of workers want union representatives to seek higher wages and bonuses in negotiations with the company, union official Jaime Graz said in a telephone interview today.

The state-owned company, the world’s largest copper producer, is offering a 3.8 percent wage increase and benefits worth 14.5 million pesos ($28,634) to sign a new 3-year wage deal.

Codelco extended the terms of an early signing bonus beyond a Dec. 23 deadline after workers rejected an offer on Dec. 22. The Chuquicamata workers’ current contract expires on Dec. 31.

Mexico’s mining sector has lost more than $3.2bn in metals production due to strikes and has seen year-on-year investment drop by 26% to $2.7bn in 2009, the Mining Chamber of Mexico said.

According to the Chamber’s report, the results for 2009 were mixed with total production flat compared to last year at roughly $10.5bn.

In October 2009, mining employment dropped to 271,000 jobs compared to 291,000 jobs in 2008.

The mining sector, however, capitalised on the surge in gold prices and some price recovery for silver, zinc, copper and lead.

Workers at Grupo Mexico’s Cananea copper mine, Sombrerete zinc mine and the Taxco silver mine have been on strike for the past 28 months.

Grupo Mexico is trying to attain court approval to terminate the collective contract and resume operations at the mines.

Mining Chamber of Mexico head Sergio Almazan Esqueda said the Mexican mining sector may fall from its position as the fourth most popular location for attracting international investment in the sector to the sixth.

“Last year, mining attracted 15% of Mexico’s total foreign investment and that figure could double in the short term if mining is promoted as a strategic, fundamental sector for promoting job creation, infrastructure and the overall economy,” Almazan said.

Maxwell Mwale told Reuters that KCM, a unit of London-listed Vedanta Resources Plc, had invested $1,5-billion in new projects, including the Konkola Deep Mining Project (KDMP), which is expected to extend the mine life of KCM by 23 years.

Mwale said KDPM, which involves deepening one of the shafts to 1 460 m, is forecast to produce 180 000 t of copper per year when the mine reaches maximum output in 2011.

“The deep mining project will be commissioned in April next year and after that KCM will start ramping up production until they reach full output sometime in 2011,” Mwale said.

KCM data shows that Konkola mine has been mined down to 950 metres level at its South number one shaft and 590 metres at the North number three shaft. The mining firm now wants to reach an ore body beneath the one currently being produced.

Mwale said apart from investing in KDMP, part of the $1.5 billion had gone into the construction of a smelter, with a capacity of 300 000 t per year, and the concentrator at Nchanga mine in Chingola

KCM operates the Konkola copper mine, the satellite Fitwaola mine and the Nampundwe pyrite mine.

Vedanta Resources will launch a copper treatment facility at its Zambia-based Konkola Copper Mine Nchanga unit to raise output.

The project involves the development of a granulated slag dump for treating copper concentrates from Nchanga, Konkola and other sources that are not operated directly by Konkola Copper Mine.

Under the smelting process, copper concentrate will be treated in an electric furnace with a flux.

The assessment report submitted to the Zambia Environmental Agency says the final products are matter and slag with the matter being further processed to generate copper anodes.

Project life is estimated at 20 years at an annual average slag production rate of 540,000t.

The Nchanga Mining Licence Area (LML34) comes under Konkola Copper Mine’s existing licence area.

Konkola Copper Mine aims to meet more than 50% of Zambia’s expected copper production by 2010 and meet rising demand from the global market.

Sergio Almazan Esqueda said results for 2009 were “mixed,” with the value of overall metals production flat compared with 2008, at about $10.5 billion.

Mining employment fell to 271,000 jobs in October 2009, compared with 291,000 for the year-ago month, but the industry benefited from a big jump in gold prices and some price recovery for copper, silver, zinc and lead, Almazan was quoted saying in a statement.

While 10 new mines producing mostly gold opened in the second half of 2009, Mexico’s biggest copper mine, Cananea, remained shuttered along with the Sombrerete zinc mine and the Taxco silver mine, the statement said.

Workers at those three idle mines, all owned by Grupo Mexico, have been on strike for 28 months. Grupo Mexico is seeking court approval to end the collective contract and reopen the mine.

The other labor-related loss noted by Almazan was a 45-day work stoppage at the MetMex metals refinery owned by Industrias Penoles.

The chamber leader said there are signs the Mexican mining industry could lose its spot as the fourth-largest attractor of global investment in the sector and fall to sixth place.

The chamber, known as Camimex, estimated that investment in the mining industry from 2009-12 would be about $7.6 billion.

Almazan called for labor law reforms and lower energy costs if the mining sector is to reach its full potential.

“Rambler had a very successful quarter completing the acquisition of the Nugget Pond Facility and raising
£5.5m in a private placing” Rambler President and CEO, George Ogilvie commented on the project’s on-going development work, “finalising plans to resume exploration and pre-production development and construction so that the Company is on target to bring the Ming Mine back into production during fiscal 2011.”

The Nugget Pond mill facility is a fully operational gold hydrometallurgical mill, which includes a gold concentrator. The facility will be adapted to process base metal sulphides from Rambler’s Ming copper mine 40 kilometres away through the addition of a copper flotation circuit, as well as process the free gold that exists in the Rambler geological system.

During the period the Eastern Canada focused mine developer raised £5.5 million before expenses through the issuance of 27.5m ordinary shares at a price of 20p per share. The proceeds of private placing are being used to finance the acquisition and refurbishment of the Nugget pond processing facility, the associated engineering and to cover ongoing working capital requirements.

Rambler is taking proactive steps to explore potential gold prospects in the area surrounding its primary copper-gold operations and the newly acquired Nugget Pond site. During the period it entered into an option agreement with Seaside Realty Ltd to earn up to a 50% undivided interest in the Corkscrew/Big Bear Property.

The Corkscrew / Big Bear property has had sporadic periods of exploration from as early as the nineteen eighties. Approximately 28 diamond drill holes have been completed in the past, intersecting gold mineralization of varying thickness and grades.

The junior mine developer will assume project management of the property for two years, during which time Rambler will be responsible for all geologic compilation and exploration management while Seaside will be responsible for all diamond drilling related costs.

The shutdown of Escondida, which accounts for 8 per cent of the world’s copper output, pushed up the price of the red metal by $180 per tonne to $7,470 on the London Metal Exchange. Chile’s President, Michelle Bachelet, called for talks to resume between the miner and the unions, who are demanding a substantial pay rise and bonuses to reflect the huge profits earned from high copper prices.

In London, the price of nickel gained $300 per tonne as volumes in LME warehouses dwindled further. China’s largest nickel producer expressed concern that the nickel market was being distorted by speculators and urged the LME to improve regulation.

“The LME is no longer a place for fair dealing metals but a paradise of speculation,” said Li Yongjun, chairman of Jinchuan Group, the largest nickel producer in China.

Nickel reached a record high of $29,200 per tonne in the forward market as stocks plummeted to less than a day’s supply. The premium for cash nickel over three-month delivery widened to almost $5,000 per tonne, prompting the LME to introduce emergency rules on Wednesday to allow short sellers to escape the squeeze.

BHP’s tough stance with the Escondida strikers may be supported by the Chilean Government, reckoned some analysts, as Escondida pays its workforce the highest mining wages in Chile, and the state copper company, Codelco, will be anxious to avoid a high settlement with its own workers. “They won’t want to see BHP set a precedent and stoke higher wage claims at Codelco,” said Robin Bhar, metals strategist at UBS.

BHP said that it had shut the mine for safety reasons but Pedro Marin, a spokesman for the strikers, accused BHP of trying to scare the workforce. “This is illegal pressure,” he said.

December copper was up 10 cents to $3.03 per pound in New York trade, while three-month copper added $234.50 to $6,664.50 per tonne on the London Metal Exchange.

Demand hopes were stimulated by the news from the US Commerce Department that the United States gross domestic product was up by 3.5 percent in the third quarter, a sign that the US economy has exited the recession.

Other factors helping to push copper higher was a decline of 325 tonnes in LME copper inventories on the session and the likelihood that a strike at a copper mine in Chile, now in its 17th day and with no immediate prospects for an end, has caused the mine to reduce production.

Other base metals prices also saw gains as aluminium added $43 to $1,955 per tonne, zinc was up $75 to $2,265 per tonne, lead was $134 higher to $2,365 per tonne, tin added $350 to $15,000 per tonne, and nickel gained $890 to $18,690 per tonne.

Among precious metals, December gold added $16.60 to $1,047 per troy ounce in New York trade, while December silver was up 42 cents to $16.66 per troy ounce, January platinum was $31.30 higher to $1,338,20 per troy ounce and, in mid-morning trade, December palladium added $7.55 to $324.95 per troy ounce.