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.

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.

Mine production has been halted in the copper-rich nation as Chile copes with a wave of aftershocks, reports Alix Steel for The Street. What it means in the long term is up in the air; can Chile get its mines up and running again quickly? Or are the temblors signs of more trouble to come for the nation? Chile accounts for one-third of global mine production, so any lingering troubles could have a noticeable global impact.

Analysts say that while the copper mine interruption is certainly a disruption to the copper supply, the larger impact will come from disruption of deliveries from the mines, and from the disruption of power supplies to the mines.

Although most of Chile’s production comes from the North, and the quake hit the Central part of the country, the damage to the highways will suspend business as usual, because of the lack of access for transporting fuel and other supplies to mines, explains Reuters on Zambia.
iShares MSCI Chile Index (ECH: 55.93 0.00 0.00%)

iPath Dow Jones UBS Copper Tr Sub-Index ETN (JJC: 45.49 0.00 0.00%)

* Oil prices rebounded above $78 a barrel on Friday after sliding more than 2 percent the day before, lifted by a weaker dollar, but worries over the U.S. economy weighed on the market.

* US stocks recovered most of their losses but ended lower on Thursday after weak employment and durable goods data added to recent worries about the strength of the economic recovery.

* Asian stocks rose on Friday as investors tried to shake off weak economic data in the United States and Europe, but lingering caution about riskier assets supported the safe-haven yen.

FUNDAMENTALS

* Japanese shipments of aluminium products rose 23.1 percent in January from a year earlier, industry data showed on Friday, underpinned by a recovery in demand in the auto, electrical appliances and food sectors.

* Japan’s refined zinc exports for January fell 0.7 percent from a year earlier to 6 526 tonnes, with Taiwan accounting for the largest share, at 25 percent, Ministry of Finance data showed on Friday.

* Japan’s refined copper exports fell 19.6 percent in January from a year earlier to 47 936 tonnes, with China the destination for more than half the volume, Ministry of Finance data showed on Friday.

* Europe’s No.2 copper producer KGHM said 2009 net profit fell 14 percent to 2.5 billion zlotys ($843 million), in line with guidance upgraded last week as a rebound in copper prices capped KGHM’s profit decline.

* Deliverable copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 28 percent from two weeks earlier, while deliverable aluminium inventories rose 3 percent, the exchange said on Friday.

TECHNICALS

* Copper support was at $6 970 a tonne and resistance at $7 248. The 14-day RSI was at 52.5

* Aluminium support was at $2 070 a tonne and resistance at $2 106. The 14-day RSI was at 45.1

Trade was cautious, however, ahead of a slew of US data including fourth-quarter gross domestic product, consumer sentiment for February and existing home sales for January.

“We have been seeing good CTA buying in the last few days. Essentially metals are still an investment product, we still see a lot of money coming in. Sentiment is still ‘buy the dips’,” said a London-based trader.

Capping gains, Shanghai copper stocks soared 28 percent from before the week-long holiday to 149 478 tonnes, the highest since late September 2002, data showed.

Copper prices on the London Metal Exchange fell about 2 percent in the previous session on a strong dollar and disappointing US jobless claims and durable goods orders data.

PRICES

* Three-month copper on the London Metal Exchange was trading at $7 100 (R55 096) a tonne at 10:32 SA time compared with $6 999 at the close on Thursday.

* Aluminium was at $2 100 a tonne from $2 086.

DATA/EVENTS

12:00 SA time – Euro Zone final HICP, Jan

12:00 SA time – Italy PPI, Jan

12:00 SA time – Japan Forex intervention data for February

N/A – Germany preliminary HICP, Feb

15:30 SA time – US preliminary Q4 GDP Economists in a Reuters survey forecast a 5.7 percent annualized pace of growth, a repeat of the advance Q4 estimate.

15:30 SA time – ISM NY NAPM for February

16:45 SA time – US Chicago ISM for February, Economists in a Reuters survey forecast a reading of 60.0 compared with 61.5 in January.

16:55 SA time – Reuters/Univ of Mich final February consumer sentiment Economists in a Reuters survey expect a reading of 74.0 compared with 74.4 in the final January report.

17:00 SA time – US Existing home sales for January

MARKET NEWS

* The yen dipped on Friday but held on to the bulk of its gains from the day before, as doubts about the pace of a global economic recovery and persistent worries about sovereign debt problems in Greece kept investors away from riskier currencies.

That marked the end to four consecutive years of dwindling output as lower grades at aging mines and labor strikes hit output of one of the main revenues-earners of the Chilean state.

The total did not include output from El Abra which is a joint venture between Codelco and a private company.

The state miner [CODEL.UL] produced 1.46 million tonnes of copper during the same period the previous year.

The giant miner produced 21,500 tonnes of molybdenum, a metal used to strengthen steel, in 2009.

* Peso jumps 1 percent following the data

SANTIAGO, Feb 15 (Reuters) – Chile’s copper export revenues CLCOPX=ECI more than doubled in January to $3.373 billion, the central bank said on Monday, lifted by a recovery in copper prices and boosting the local peso.

The value of Chile’s copper exports totaled $1.598 billion in January 2009.

Last month, the central bank reported copper exports came to $3.174 billion in December. Chile is the world’s top copper producer, mining about a third of global supply.

Chile’s peso CLP=CL rose 1 in early Monday trade to 522.70/523.20 per dollar compared with Friday’s close of 528.00/528.50, on the back of the data, which adds to evidence that the economy is recovering from its first recession in a decade, a recession that was triggered by global financial crisis.

Copper revenues fell last year after a sharp drop in copper prices due to global crisis, which dented the South American country’s revenue intake.

But a steep recovery in prices in recent months has lifted copper export income, traditionally Chile’s main export earner.

The government said last month that output of the red metal rose 0.8 percent from the previous year to 5.4 million tonnes in 2009.

Chile’s copper output rose 3.8 percent in December [CLCOPP=ECI] from the same month the previous year, according to government data. Output data for January are due out Feb. 26.

“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.

BHP has agreed to treatment and refining charges of $46.5 a tonne and 4.65 cents a pound, said Nippon Mining’s president, Masanori Okada, also the head of the Japan Mining Industry Association.

The prices represent a 38 percent decline from last year.

“Although there are some negotiations still left with other miners, we think of this as the benchmark (for 2010),” said Okada, who was speaking at a mining association news conference.

Nippon Mining owns 66 percent of Pan Pacific Copper Co Ltd, Japan’s top copper smelter, with the reminder held by Mitsui Mining and Smelting Co Ltd (5706.T: Quote, Profile, Research).

Earlier this month a spokesman at Nippon Mining had acknowledged that an agreement had been reached for the 2010 processing fees with BHP, but he declined to elaborate. [ID:nTOE60E02H]

Copper treatment and refining charges for 2010 were first set at those levels with U.S. miner Freeport-McMoRan Copper & Gold Inc (FCX.N: Quote, Profile, Research) late last year.

Treatment and refining charges were set at $75 and 7.5 cents in 2009.

“Japan’s nonferrous metals firms cannot count on their smelting sectors (to make a profit) any more … and in our case that is why we are putting our efforts in the upstream sector,” Okada said.

He said other copper smelters were strengthening other departments such as recycling or electronic materials to make up for their faltering smelting divisions, once a key source of revenue for Japanese smelters.

The shares changed hands on Friday in off-market transactions at 103 zlotys each, Reuters data showed – the price set by Poland’s treasury after it completed bookbuilding for the deal, which the treasury said was oversubscribed by 50 percent.

The ministry added in a statement that 56 percent of the shares offered were obtained by local investors, including pension funds, which bought around a third of the stake.

The news helped KGHM’s share price close Friday’s session 0.4 percent up at 104.5 zlotys, after a 4.5 percent fall the previous day.

Reuters first reported on Thursday what was an unexpectedly early move to seek financial buyers for the stake – but one which analysts said reaped dividends for a government facing a ballooning budget deficit.

Fuelled by resurgent metal prices, the stock nearly quadrupled in price last year.

“The treasury picked a very good moment for the sale. Copper is at a 16-month high and the outlook for metals is varied,” said Robert Maj, analyst at KBC Securities in Warsaw. “I thought (the price set by the ministry) would be a little lower.”

Copper MCU3 was steady on the London Metal Exchange on Friday, trading at $7,533 a tonne, having hit a 16-month high of $7,796 the previous day.

Thursday’s report that the share sale was imminent contributed to a lowering of yields on Polish debt as the deal highlighted the commitment of the European Union’s largest ex-communist member to limiting its borrowing in 2010 with funds from asset disposals.

Some investors were also betting that conversion of foreign cash to pay for KGHM shares would help the zloty, although dealers said the impact would be limited.

“Some players on the FX market speculated on this news but it seems like it was only small front-running,” one Warsaw-based dealer said.

“The market still expects privatisation inflows to boost the FX market further on but … sentiment is still mixed and right now most investors have a ‘wait-and-see’ approach,” he said.

The zloty was trading 1.1 percent up at around 4.0680 against the euro.

The centre-right government, which expects its budget deficit to soar to 52.2 billion zlotys ($18.2 billion) in 2010, said last year it would sell as much as 10 percent of KGHM on the market in 2010 but retain control over the miner.

Aluminium rallied on supply concerns as harsh cold weather hit parts of China. Health concerns over lead production in China boosted lead and zinc to multimonth highs.

At the New York Mercantile Exchange’s COMEX division, copper for March delivery rallied to a session peak at $3.5220 per lb, the highest level for the red metal on the spot daily third position chart since August 2008. The benchmark contract settled up 8.10 cents at $3.4945.

Benchmark copper for three-months delivery on the London Metal Exchange closed up $175 at $7,660 a tonne, after hitting another 16-month top at $7,742.

“Today is mostly a macro play again,” Michael Widmer, an analyst at Bank of America said. “Some of the car sales data from the United States wasn’t too bad, and manufacturing data wasn’t too bad either.

“People are increasing exposure to metals at the moment.”

Data on Tuesday showed a surge in new factory orders, offering assurance the economic recovery remained on track.

Later that day, the outlook for metals demand got a boost from figures showing U.S. auto sales ended 2009 on an upswing. There also was strong manufacturing data from the United States and China this week.

“Good news, bad news, we’re still going up,” Craig Ross, vice president of Chicago-based ApexFutures.com said, referring to the red metal’s parabolic price gains throughout 2009 and at the start of the new year, even as fundamental support from labor action in Chile faded.

News that Chile’s Codelco, the world’s No. 1 copper producer, had resumed operations at its massive Chuquicamata complex after workers voted to end a strike failed to stem the bullish momentum.

“This is a bull market and it looks like the $4.00 level is the next stop … probably sometime in this first quarter,” he said.

But analysts said copper and aluminum may come under some pressure as their weightings are reduced in the Dow Jones UBS Commodity Index next week.

CHINA SNOW

Aluminium ended at $2,385 from $2,302. The metal used in transport and packaging earlier hit $2,394, its highest since October 2008, as analysts said winter weather conditions in China were supporting prices.

“The snow storms are likely to generate concerns over lack of availability of metal,” said Daniel Major, an analyst at RBS Global Banking & Markets.

Zinc closed at $2,718 from $2,575, earlier hitting $2,725, its highest since early March 2008. Battery material lead ended at $2,680 from $2,523, having touched $2,690, its highest since early May 2008.

Both metals, which are often produced together, were also boosted by market talk of renewed health concerns over lead production in China, which one media outlet said had led to the closure of a battery plant in the country.

“They have closed this one plant, and you can be absolutely certain they are going to look at others,” John Meyer, an analyst at investment bank Fairfax said. “Anything like this tends to lead to lead producers having problems.”

Fairfax estimates that China will produce about 1.724 million tonnes of lead this year, which is 19 percent of annual global production.

A fresh rise in LME copper stocks reminded investors that demand outside of China remained weak and Chinese purchases have cooled.

China is the world’s top consumer of the metal. Inventories climbed 2,050 tonnes to a 9-1/2 month high of 507,400 tonnes.

Tin was untraded in closing LME rings but last bid at $17,800 from $17,350, but earlier hit a 15-month high at $17,825, while nickel ended at $19,155 from $18,710.

In their second assembly this week, the miners set 5:00 a.m. Monday as the starting time for a strike by the roughly 5,600 workers at Chuquicamata, the world’s second-largest copper mine, located some 1,500 kilometers (932 miles) north of Santiago.

Codelco, the globe’s No. 1 copper producer, told union leaders that because workers did not accept the proposed three-year contract by noon Thursday, the offered bonus was cut from 11.5 million pesos ($23,500) per worker to 6.5 million pesos.

The revised offer retains a 3.8 percent pay hike as well as no-interest loans worth around $6,000 to each employee.

In a statement issued Thursday, Codelco restated its willingness to continue talks aimed at reaching “a mutually advantageous accord.”

But the unions declared negotiations at an end after rejecting the latest offer from the company.

Union officials said the workers want a pay raise of 4.7 percent and a bonus comparable to the 14 million pesos ($28,000) each that BHP Billiton paid out earlier this year to secure labor peace at its La Escondida copper mine, the world’s largest.

Chuquicamata accounts for around 1.6 million tons in annual copper production, more than a third of Codelco’s total output, and a strike would cost the firm around $8 million a day.

This is the first time Codelco workers have voted to strike since 1996 and revealed fissures between union officials, which backed the company’s offer, and the rank and file.

Codelco posted pre-tax profit of $2.06 billion for the first nine months of this year, compared with $4.97 billion for all of 2008.

Negotiations resumed today, the last day of the current contract, according to union official Miguel Lopez. A company spokeswoman, who declined to be named because of company policy, confirmed that the renewed talks failed to produce an agreement.

“We are not going to sign today,” Lopez said by telephone. “We will just have to carry out the strike.”

Chuquicamata is part of state-owned Codelco’s Norte unit, which accounted for almost half of the Santiago-based company’s copper output of 1.55 million metric tons in 2008. Codelco is the largest copper producer. Worldwide production this year is estimated at 18.1 million tons, according to Barclays Capital.

Copper futures rose as much as 1 percent in New York, touching $3.379 a pound, the highest price in almost 16 months.

Most of the loan, about $2-billion, will fund the development of the Boschekul copper project in northern Kazakhstan, which could produce 12,5-million tons of copper ore annually.

The FTSE 100-listed miner said on Wednesday it would use $100 million to develop the Bozymchak gold/copper project. The remaining $600-million – available for signing over the next three years – would be allocated to other projects.

“Bozymchak will now move into development, with first output in 2011, and the feasibility study for our major copper growth project at Boschekul will start in early 2010,” said Chief Executive Oleg Novachuk.

“Securing this funding is a major boost for copper production from Kazakhstan and will help to meet the growing demand of our customers in China.”

China is the world’s top consumer of copper, a metal used widely in construction and power.

Shares in Kazakhmys were up 0,2% at 1313 pence at 1144 GMT, valuing Kazakhstan’s largest copper producer at about 7-billion pounds ($11,2-billion).

Kazakhmys said in October it was in talks with China Development Bank and Samruk regarding a major unsecured loan facility.

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.

The company will pay $46.50 a metric ton and 4.65 cents a pound in so-called treatment and refining charges, the two people said yesterday, declining to be identified as the agreements aren’t public. Bill Collier, a spokesman for Phoenix- based Freeport, declined to comment in an e-mail.

The agreements may set a benchmark for talks with smelters in China and India, which are yet to settle with suppliers. The fees for producing metal from semi-processed ore, known as concentrate, were lower than estimates and usually drop when there is a shortage as smelters compete for supplies.

“Chinese smelters can get a bit higher, perhaps around $50 as domestic supplies of copper ore and scrap are improving,” Zhou Qian, an analyst at Shanghai-based commodities researcher CBI China Co. said today. Zhou said Chinese smelters yet to re- start talks with mining companies.

Chinese output of copper concentrate gained 10 percent in the first 11 months to 948,000 tons in metal content, according to the National Bureau of Statistics. A Chinese smelter official who declined to be identified said negotiations were yet to re- start with suppliers.

Talks between Chinese smelter operators and overseas mining companies have stalled amid diverging price expectations, 21st Century Business Herald reported Dec. 21, citing Jiangxi Copper Co.

Price Difference

Overseas miners insisted on $43 a metric ton to have ore smelted whereas Chinese producers asked for $60, the newspaper said, citing Jiangxi Chief Financial Officer Gan Chengjiu. A call to the company today was not immediately answered.

Major smelters in Japan are still in talks with BHP Billiton Ltd., which owns the Escondida mine in Chile, to set 2010 fees, according to the two people. Escondida is the world’s biggest copper mine.

Next year’s fees from Japan are down from $75 a ton for smelting and 7.5 cents a pound for refining for 2009 and from $50 and 5 cents for midyear contracts started July. Midyear contracts typically cover less than 20 percent of the smelters’ needs, according to Atsushi Yamaguchi, a Tokyo-based analyst at UBS AG.

The global deficit of the raw material may rise fivefold to 1 million tons next year, Christine Meilton, an analyst at CRU, said Nov. 9. CRU had forecast the 2010 charges to be about or just less than $50 per ton and 5 cents per pound.

Concentrate Shortage

“The difference between the availability of concentrate and the smelting capacity is still growing and that will continue for the foreseeable future,” Eleni Joannides, copper research manager at London-based research company CRU, said yesterday by phone.

Freeport rose 49 cents to $78.45 in Dec. 22 New York Stock Exchange composite trading. The shares have more than tripled this year.

Copper in London has more than doubled this year as China’s imports rose to a record. The contract for delivery in three months gained 0.1 percent to $6,890 a ton on the London Metal Exchange at 11:28 a.m. in Shanghai.

Treatment fees are expressed in dollars per ton of concentrate received and refining fees in cents per pound of copper contained in the concentrate. The fees are deducted from the price paid by smelters to miners for the concentrate.

Smelter Profits

“Given current foreign exchange rate trends, copper prices and sulfuric acid prices, around 13 cents a pound may be the level at which the Japanese operators can remain profitable,” Yamaguchi said in a note on Nov. 6. The 13-cent-per-pound level is equivalent to $55 a ton and 5.5 cents a pound, he said.

The shortage of concentrate emerged after China expanded smelting capacity, CRU’s Joannides said. “If smelters don’t get enough concentrate, they will have to shut,” she said.

Pan Pacific Copper, Japan’s top copper smelter, is owned 66 percent by Nippon Mining & Metals Co., a unit of Nippon Mining Holdings Inc., and 34 percent by Mitsui Mining & Smelting Co. Sumitomo Metal Mining ranks second ahead of Mitsubishi Materials. Calls to the smelters weren’t answered as it is a national holiday in Japan today.

‘Proceeds of the disinvestment would go to the government but we need money for our capital expenditure for which we have proposed an FPO,’ chairman and managing director Shakeel Ahmed said on the sidelines of a seminar organised by Confederation of Indian Industry.

The public sector integrated copper producer has decided to hit the capital market next year with the government intending to divest 10 percent of its 99.59 percent holding. This would take the total stake dilution to 20 percent.

The rest of the shares are with banks and financial institutions (0.09 percent), private and corporate bodies (0.05 percent), and the public (0.27 percent).

The company plans to raise Rs.1,700 crore through the FPO, which would be about half of its Rs.3,500 crore expansion plan.

‘We plan to raise output by 3.5 times in five-seven years’ time through reopening of closed mines, optimising production from existing mines and acquisition of new ones,’ Ahmed said.

Hindustan Copper’s annual ore production, at present, is 3.19 million tonnes, which it plans to take up to 11.4 million tonnes by 2019.

About the company’s plans to acquire mines overseas, he said talks have started with a private player in Namibia for acquiring mining leases.

‘We are also eyeing Afghanistan and Chile to get copper mines,’ Ahmed said.

The company expects to touch a net profit of Rs.100 crore in the current fiscal, he said.

BHP Billiton holds a 57.5% share of the Escondida project. The remainder is held by Rio Tinto (30%) and a Japanese partner.

The main stock index has added 7.5 percent since then.

Copper producer Sterlite Industries dropped 3.2 percent to 860.45 rupees, while aluminium producer Hindalco declined 1.6 percent to 144.90 rupees.

The outlook for metals pack is not quite positive as dollar may become steady or rise in the near term, exerting pressure on commodities, said Ambareesh Baliga, vice-president of Karvy Stock Broking.

Tata Steel, the world’s eighth-largest steel maker, was down 2.8 percent at 559.70 rupees.

Its European unit Corus said it will close a plant in northeast England and shed 1,700 jobs after it failed to secure a long-term partner for the site’s output.

At 01:32 p.m. (0802 GMT), the 30-share BSE Index was trading 0.23 percent lower at 17,061.73, with 17 of its components in the red.

“The market is going to be lacklustre for now; until we have fresh triggers to push it higher,” said Jigar Shah, vice-president of equity sales at brokerage Motilal Oswal.

“All positives are already considered. The next earnings season in January could be the next trigger we can watch,” he added.

Stockpiles monitored by the London Metal Exchange tumbled 2.4 percent to 480,400 metric tons. That’s the biggest one-day drop since Oct. 21. Copper prices have surged 57 percent this year on speculation that government spending will revive global growth and spur consumption of raw materials.

“The market has strengthened on the back of the decline in LME copper inventories,” Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said today in a report.

Copper futures for July delivery climbed 8.05 cents, or 3.8 percent, to $2.209 a pound on the New York Mercantile Exchange’s Comex division.

The price of copper will continue to climb as demand increases in emerging economies including China, the world’s biggest metals user, said Michael Cuggino, the chief executive officer of Pacific Heights Asset Management LLC.

“What’s happening in copper now is a reflection of the broader global economic story,” said Cuggino, who also helps oversee $3.4 billion as a portfolio manager. “We’re still expecting to see long-term global growth that’s going to drive demand for copper and the other commodities,” he said yesterday in an interview in New York.

Cuggino recommends investors buy shares of Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, as a way to take advantage of higher metals prices. Phoenix-based Freeport rose 81 percent this year before today.

Favoring Freeport

“We like Freeport now,” Cuggino said. “The things that will drive copper, the growth in China and the emerging markets, those things are the same reason to buy Freeport.”

Freeport gained 25 cents to $44.51 at 2:01 p.m. in New York Stock Exchange composite trading.

Still, stagnant U.S. economic growth may limit copper’s gains, said Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York.

Industrial production in the world’s largest economy fell 1.5 percent in March, the 14th drop in the past 15 months, as factories trimmed unwanted stockpiles, the Federal Reserve reported today.

“Copper may be able to get as high as $2.25, but after that it is going to meet resistance,” Groenewegen said. “Levels that high do not seem sustainable given the weakness that is still present in the economy.”

Yesterday, copper touched $2.2415 a pound, the highest for a most-active contract since Oct. 20.

On the LME, copper for delivery in three months climbed $120, or 2.6 percent, to $4,819 a ton ($2.19 a pound). The price reached a record $8,940 on July 2.