Asarco follows trend, cuts copper output

Vancouver — Joining the ranks of other major producers, Phoenix-based Asarco, a subsidiary of Grupo Mexico, has announced further cuts to its copper output. Production at the Mission mine in southern Arizona will be slashed by an additional 23%, bringing to 61% the amount cut in the past month.

The latest cuts are expected to cost 90 people their jobs.

In the face of oversupply and lower demand, the company has also lowered production of refined copper at the Amarillo refinery in Texas by 95,000 tonnes per year, or 29%. Some 41 jobs are expected to be lost there.

In 2001, Asarco has trimmed overall refined copper production by 151,000 tonnes.

“Although the price of copper has rebounded slightly in the last few weeks, the average price for the year is still down,” says Asarco President, Genaro Larrea. “We will continue to review our operations and be prepared to reduce production further if it is appropriate.”

The world’s major copper producers have drastically cut output in the past nine months in a bid to counter weak demand and boost prices, which recently fell to their lowest levels since 1987. This trend is evident in the following developments:

– Base metal titan Noranda (NRD-T) intends to close the Gasp copper smelter in Canada for six months starting in 2002 (see story, page 1);

– Kennecott Utah Copper, a subsidiary of Rio Tinto (RTP-N), is about to close its North Concentrator plant near Magna;

– Anglo American (AAUK-Q) recently cut the 2001 production forecast at its Konkola operations in Zambia to 200,000 from 240,000 tonnes;

– Major Chinese copper producers agreed to cut copper output in 2002 by 100,000 tonnes;

– London-based Antofagasta says it will slice 40,000 tonnes from its 330,000 tonnes of concentrates expected from the Los Pelambres copper mine in Chile;

– BHP Billiton (BHP-N) slashed 80,000 tonnes per year at its 57.5%-owned Escondida mine in Chile and 90,000 tonnes per year at the Tintaya mine in Peru.

The world’s second largest copper producer, Phelps Dodge (PD-N), started the cutback trend in March by announcing it would trim 80,000 tonnes per year from its global production.

Corporacion Nacional del Cobre de Chile (Codelco), the world’s largest producer, has yet to announce any significant cuts.