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BHP BILLITON EXTENDS COPPER PRODUCTION CUTS
BHP Billiton Base Metals today announced it would extend the copper
production cuts announced by the Group last year, following a market
review that determined an absence of market demand for additional copper
in the short term.
On November 8 2001, in response to deteriorating market conditions, BHP
Billiton Base Metals detailed a 170 000 tonne reduction in copper
production to be delivered in the form of a constrained production program
at Escondida, and the temporary closure of the sulphide operation at
Tintaya.
The extension of the production cuts effectively removes an additional 80
000 tonnes of copper production from Escondida through the end of this
calendar year. Combined with the previously announced 170 000 tonne cut,
this brings the total reduction in copper production to approximately 250
000 tonnes for the period of November 2001 through December 2002.
President BHP Billiton Base Metals, Brad Mills, today said: "It has
become apparent that although total world copper production has decreased,
demand has failed to pick up substantially. Stocks have continued to grow
at a significant rate through the first half of the year. On May 15,
2002, combined LME-COMEX-Shanghai stocks stood at 1 493 392 tonnes
compared to warehouse stocks of 985 549 tonnes on November 9, 2001, when
the original production cuts were announced."
Mr Mills continued: "Although leading indicators suggest that demand
should begin to improve, the current physical market continues to be weak.
At the time of announcing the original production cuts, it was made clear
we would continue to monitor the market conditions and would review our
operating strategy accordingly, midway through this calendar year."
At Tintaya, the sulphide operation, which is capable of producing 90 000
tpa of copper in concentrate, will remain closed until at least January
2003. BHP Billiton will continue to mitigate the impact of the temporary
closure on the workforce through the extension of partial employment
arrangements.
The Tintaya oxide plant, which commenced commissioning in April 2002, will
continue to produce high quality, low cost cathode at the rate of 34 000
tpa.
At Escondida, the mine will continue its constrained operating strategy
through to at least the end of calendar 2002 and will take this
opportunity to undertake optimising modifications to the existing
concentrator. The net result is that Escondida copper production for
calendar 2002 will be slightly less than calendar 2001, despite the start
up of Escondida Phase 4 in September 2002.
Mr Mills said: "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. Post Phase
IV commissioning, Escondida`s capacity will increase to 1.2 Mtpa over the
next 5 years, and Tintaya`s capacity including cathode production, will
increase to 124 000 tpa.
"To meet medium term demand, we continue to advance the final phases of
the expansion of Escondida, through the Norte and Sulphide Leach projects.
These expansions will be managed to maintain Escondida production at
approximately 1.2 Mtpa for many years to come."
BHP Billiton Base Metals will also continue to expand its production base
as the market allows. The Spence project is one of the most attractive
major developments currently available today and will result in an
additional 210 000 tpa of copper cathode with a C1 cost of around 35c/lb.
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Further information can be found on our Internet site:
http://www.bhpbilliton.com
Date: 28/05/2002 09:07:37 AM Produced by the SENS Department
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