BHP Billiton extends copper cuts

Vancouver – In response to continued weak demand for copper, BHP Billiton (BHP-N) plans to extend its production cuts at its Escondida and Tintaya operations.

“It has become apparent that although total world copper production has decreased, demand has failed to pick up substantially,” states Brad Mills, President of BHP Billiton Base Metals. “Stocks have continued to grow at a significant rate through the first half of the year.”

In November 2001, the diversifed major detailed a 170,000 tonne reduction in copper production by constraining output at Escondida in Chile, and temporarily closing the sulphide operation at Tintaya in Peru. The major’s latest move removes an additional 80,000 tonnes of copper production from Escondida through the end of this calendar year. In total, the combined cuts at the operation now tally 250,000 tonnes over the course of the year. The company will undertake optimising modifications to the existing concentrator during the slow-down. Overall, production at Escondida is expected to produce slightly less copper in calendar 2002, then calendar 2001, despite the start up of Escondida Phase 4 in September 2002.

“Although leading indicators suggest that demand should begin to improve,” adds Mills, “the current physical market continues to be weak.”

At Tintaya, the sulphide operation, which is capable of producing 90 000 tonnes of copper in concentrate per year, will remain closed until at least January 2003. The oxide plant, which began operation in April, will continue to produce copper cathode at the rate of 34,000 tonnes per year.

“Looking forward to calendar 2003, if market conditions warrant, BHP Billiton will be in a position to respond to real increases in demand by operating Escondida and Tintaya at full capacity,” says Mills. “Post Phase IV commissioning, Escondida’s capacity will increase to 1.2 million tonnes per year over the next 5 years, and Tintaya’s capacity including cathode production, will increase to 124,000 tonnes per year.”