CVRD eyes copper in Brazil (November 05, 2001)

Vancouver — Companhia Vale do Rio Doce (CVRD) has inked a US$42.5-million deal with Phelps Dodge (PD-N) to pick up the half-stake it does not already own in the Sossego copper-gold property in north-central Brazil.

The announcement coincides with Phelps Dodge’s decision to cut back on copper production in the wake of low prices and CVRD’s decision to develop copper as one of its core business areas.

In 1998, the companies entered into a 50-50 joint venture at the US$400-million project, intending to produce 140,000 tonnes of copper concentrates and 3 tonnes of gold annually.

A feasibility study pegged reserves at more than 300 million tonnes grading 1.02% copper and 0.3 gram gold. The large open-pit project is slated to start up in 2004 at a respectable cash cost of US32 per lb. of copper concentrate.