21-Oct-03

Russian copper, nickel and cobalt output rise during 2003
Refined copper output expanded by 4.9% during January-September 2003 in the Chelyabonsk region and in September alone it went up by a massive 99% year-on-year in the, the State Statistics Committee said.

Nickel and cobalt output in the Chelyabinsk region went up by 28.6% year-on-year in January-September 2003 and during September by 6.1%.

The Chelyabinsk region's non-ferrous enterprises produce about 65% of Russia's zinc, 12.6% of refined copper and about 3% of nickel.

Morenci copper restarts following fire
Full production was restored Sunday, October 19, at Phelps Dodge’s Morenci copper operation in Arizona following a fire three days earlier at one of Morenci’s four solution extraction plants.

Phelps Dodge said today that it expects to meet its copper-production targets both at Morenci and companywide for the fourth quarter.

The fire severely damaged four of 10 mixer-settler tanks at the Metcalf SX plant. Six of the unit’s tanks have resumed operation, and the mine has increased flows through its other SX plants to meet production targets.

The one-time impact of the fire on the cost of production for the fourth quarter is expected to be $5 million to $10 million. The impact beyond the fourth quarter is expected to be minimal.

Company officials said the cause of the fire still is being determined.

20-Oct-03

Yunnan copper mine halted by quake
China Dayao copper mine will halt production for at least another week due to $6 million of damage caused by an earthquake, the division of China's third-largest copper producer, Yunnan Copper Industry (Group) Co said today. Last Thursday, an earthquake registering 6.1 on the Richter scale rocked Dayao, in the southwestern province of Yunnan. Three people were killed and more than 20,000 homes were toppled, state media said on Sunday.

Dayao, which produces 15,000 tpy of copper in concentrate, is expected to lose more than 400 tonnes in production due to the shutdown.

The company expects to fix the damaged production and infrastructure facilities in one week, but the . local government will decide the date for resumption of production.
There were no casualties among the 400 miners working at the time of the quake.

Jinchuan looks to boost output, quality and profile
China Jinchuan Group has set three year development targets designed to improve both its products output and quality and also to increase its international profile. In a statement on its website the company said it plans to raise output for nickel to 100,000 tonnes, copper to 250,000 tonnes, cobalt to 4,000 tonnes, rare and precious metals to 4,000 kg and chemical products to 1.2 million tonnes in 2006.

It also plans to "proceed further the development of Engineering Contracts, Machine Manufacturing, International trade, New materials development based on the two resources and two markets from home and abroad.".

This will, it states, "greatly improve the international competitiveness, of the Jinchuan Group" and promote it as "a large nonferrous metals and material chemical industry group known [throughout] the world".

16-Oct-03

Cobalt production drops in Zambia
According to the central bank governor of Zambia, Caleb Fundanga, cobalt production for the first eight months of this year dropped to 2,238 tonnes compared with 2,776 tonnes during the same period in 2002 and cobalt exports for the period fell to 2,118 tonnes from 2,893 tonnes.

During the same period copper exports rose to 233,133 tonnes from 218,076, pushing earnings from the commodity up to $381 million from $338 million. Zambia's finished copper production rose marginally to 225,177 tonnes between January and August this year from 219,138 in the same period in 2002.

Fundanga told reporters that the increase in copper production was mainly due to the rise in output at most of the mines and that there has been also a continuous improvement of copper prices which is encouraging high production.

Rising international market prices and increasing demand among the world's major consumers were the reasons why more copper had been exported than was produced this year.
With good prices and strong demand the mines are encouraged to sell more copper including the stockpiles and this is what has been happening, he added.

Mining production would climb further after the country's premier Konkola Copper Mines (KCM) and the Roan Antelope Mining Corporation of Zambia (Ramcoz) get fresh investment capital from foreign investors early next year, he noted.

Last week, Mines Minister Kaunda Lembalemba told Reuters that Zambia's copper production was expected to double to 750,000 tonnes by 2007.

Copper and cobalt mining account for most of Zambia's foreign exchange earnings, with its vast mines the main employers of the population of 10 million.

Inco slow recovery from strike hits production
LONDON (Metal-Pages) 16-Oct-03. Canadian nickel and cobalt producer, Inco Limited said that it is taking longer to get back to full production at its Sudbury Ontario smelter after a three-month strike and that this will adversely affect its production of nickel, copper cobalt and platinum-group metals ("PGM") in the third and fourth quarters of 2003.

A strike of the unionised workforce at the Company's Ontario operations began on June 1, 2003 and a new collective agreement ending the strike was entered into on August 28, 2003.

"We have not had a three-month strike at Ontario in 20 years. We expected to overcome these ramp-up problems earlier but unfortunately that was not the case," stated Scott Hand, Chairman and Chief Executive Officer.

The Company's Ontario operations have experienced a series of unanticipated problems principally at its smelter and related facilities which were associated with the ramp-up of those facilities after the strike. These problems, which have been resolved, included outages or curtailments of
operations at the Ontario operations' oxygen plants and acid plant.

These ramp-up problems have adversely affected production of nickel, copper and PGMSs for the third quarter of 2003 beyond what the Company had assumed in its July 22, 2003 projection for its 2003nickel unit cash cost of sales after by-product credits.

As a result of these lower production levels, Inco anticipates that its nickel unit cash cost of sales after by-product credits for the third quarter of 2003 will be about US2.25 to $2.30 per pound as compared with the Company's July 22, 2003 projected average nickel unit cash cost of sales after by-
product credits of U.S. $2.05 per pound for 2003.

The Company currently expects that its nickel production for 2003 will be about 410 to 415 million pounds. Higher than planned production at theCompany's Manitoba and PT International Nickel Indonesia Tbk ("PT Inco")
operations is expected to largely offset the shortfall in production at the Ontario operations for the third and fourth quarters of 2003.

As a result of these same start-up problems, PGM production for 2003 will be about 205,000 to 210,000 troy ounces as compared with the Company's July 22, 2003 projected three month strike-affected plan of 280,000 troy ounces and
copper production for 2003 will be about 5 to 10 million pounds below the Company's July 22, 2003 three month strike-affected projection of 205 million pounds. These smelter problems and the relatively long lead times to refine
PGMs are expected to result in only minimal PGM production from Ontario in the fourth quarter of 2003.

The reduced production levels are expected to significantly adversely affect fourth quarter 2003 nickel unit cash cost of sales after by-product credits. Production of PGMs lost in the fourth quarter of 2003 is expected to be made up in 2004 and Inco currently expects that PGM production will be about 400,000 ounces in 2004. Inco currently projects, largely as a result of only minimal PGM production for the quarter, that these unit cash costs for the fourth quarter 2003 will be about
U.S. $2.55 to $2.65 per pound based upon currently prevailing exchange rates.

Inco currently projects that its overall nickel unit cash cost of sales after by-product credits for 2003 will average about U.S. $2.20 to $2.25 perpound, also based upon currently prevailing exchange rates.

The Ontario smelting and refining operations are currently operating close to planned levels. "The Ontario smelter facilities have now been operating extremely well and we believe that the ramp-up problems at these facilities are behind us," indicated Peter C. Jones, President and Chief Operating Officer.

While the Ontario operations have sufficient intermediate concentrate to smelt and refine to meet current planned production levels for these operations for the fourth quarter of 2003, one of the Ontario operations' mines has experienced an ore pass problem which may not be resolved until the first quarter of 2004 and could adversely affect production in 2004.

Inco continues to evaluate a range of actions to reduce costs andto offset cost increases experienced as a result of the appreciation of the Canadian dollar, higher energy costs and increased pension costs. Inco’s objective remains to reduce controllable costs by 10% to 15% over the next 12 to 18 months. It has reduced employment levels at its Ontario
operations by some 160 positions or about 3% since the strike at those operations began in June 2003. To reach this cost reduction objective, Inco is planning to put in place new productivity programs and other actions.

Given the recent increase in the London Metal Exchange (LME) cash nickel price in the fourth quarter of 2003 to date and the effect that this rise has on how the price for PT Inco's matte product is calculated and the pricing of certain of the Company's specialty nickel products Inco currently estimates that its fourth quarter 2003 premiums will be in the range of U.S. $0.02 to $0.08 per pound of nickel, as compared with the Company's July 22,2003 projected range for premiums of U.S. $0.12 to $0.18 per pound for that quarter.

Noranda set to cut back output and jobs at Horne
Noranda’s Horne copper smelter is set to cut production by 20% and cut staff levels by nearly a third as part of a cost-cutting initiative aimed at restoring the smelter's profitability, as well as its long-term viability.

The lower production decision was made to scale back treating material that offers the lowest margins, especially off-shore materials, and to bring smelter production back to its optimum level under these economic conditions, said Noranda. Total feed volume will decrease from 840,000 tonnes to approximately 650,000 tonnes by mid-2004. Anode production will be reduced by 20%, diminishing from 186,000 tonnes to 145,000 tonnes per year.

Noranda also intends to intensify its recycling activities.

The measures, announced Thursday, reflect three principal factors that have had a negative impact on the Horne's profitability:

The growing Asian involvement in the copper concentrate market, particularly from China, has driven treatment charges to historically-low levels;

The strengthening of the Canadian dollar against the US dollar;

The decline of ore reserves from local mines has resulted in an increase in demand for more costly "off-shore" concentrates.

Noranda said that low treatment charges have caused the smelter's revenues to drop at the same time as its operating costs are expected to rise considerably, largely due to the gradual disappearance of better-priced local supply sources.

Concentrates from Europe or Latin America cost more for the smelter since they need to be shipped by sea and then by rail.

In addition, the smelter receives most of its revenue in US dollars. Since the beginning of 2003, the strengthening Canadian dollar against the US currency has reduced the smelter's revenues by almost 15%.

Horne is also carrying the burden of environmental costs. It said: "For the past several years, the Horne smelter has made considerable investments to reduce sulphur emissions. Contrary to some of its competitors in other provinces, the smelter has had to incur higher costs for the production and distribution of sulphuric acid. Noranda favours strong environmental standards, especially for the capture of sulphur dioxide emissions, but believes that these standards must be applied equally to all producers across Canada."

Lower production will mean less employees and Noranda will reduce its,workforce by approximately 100 employees, primarily from staff employees, between now and the end of December 2003. A further reduction in personnel (approximately 120 employees) will also be necessary in June 2004, upon reaching the revised production level. The total number of employees will be reduced from 700 to 480, amounting to a 30% reduction.

Al Giroux, general manager of the Horne smelter commented: "We are going through a very difficult period and we need to act now to ensure our survival over the short and medium term. There is no doubt that we want to continue operating our plant over the long term. The choices we make today should allow us to do that.

"One of the positive aspects of the measures we announced is the possibility of restarting the idled parts of the plant should there be a significant and sustained rise in treatment charges or an increase in locally-sourced concentrates.

"We are committed to providing our employees with all of the necessary support to lessen the impact from the announcement as much as possible. We are offering early retirement and voluntary departure programmes for non-unionized personnel, and will provide job search assistance."

Giroux added: "Recycling and the treatment of complex materials are the way of the future for the Rouyn-Noranda metallurgy facility and will remain a priority over the coming years."

Since the beginning of 2002, Noranda has implemented several measures to improve the profitability and the long-term viability of its Canadian Copper and Recycling business unit (CC&R). In 2002, the Gasp?smelter was permanently closed. Over the last two years, the CC&R workforce, including the Gasp?smelter, has been reduced by almost 1,000 people, or 30%.

Noranda has also opened a new electronics recycling facility and is continuing its efforts to reduce inventories and costs within all of its business groups and operations.

FROM LONDON (Metal-Pages)