Vedanta says weighing Australia copper mine's future after rock slide

SYDNEY, July 2 Wed Jul 2, 2014 3:23am EDT

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SYDNEY, July 2 (Reuters) - Vedanta Resources Plc is weighing the future of its Mt Lyell copper mine in Australia after a rock slide this week delayed plans to restart operations following a six-month closure.

The mine in Tasmania state, shut in January following three fatalities and scheduled to reopen late this month, now faces additional repair costs that places the mine's ability to turn a profit into question, according to a spokesman for Vedanta subsidiary Copper Mines of Tasmania (CMT), which runs the mine.

CMT was assessing what work was required and hoped to have a clearer view in the next few days, the spokesman said.

"We will also need to reassess the economic viability of the mine, as this latest incident will incur significant additional costs which will negatively impact on what was already a marginal economic position," CMT said in a statement

No injuries were reported from the slide in an unstaffed shaft way used for ventilation at the 118-year-old mine, which yields about 24,000 tonnes of copper a year.

Three workers were killed in the mine over a 39-day period in December and January, leading to the suspension of operations. Two workers died after falling down a shaft. A mud slide killed a third man.

About 300 workers have remained on half-pay since the closure in anticipation of a July restart, the spokesman said, adding Vedanta was also conducting exploration work to find additional copper sources to extend the mine's operating life.

Vedanta Chief Executive Tom Albanese, the former head of Rio Tinto , appointed in April with a brief to get the best out of Vedanta's underperforming mines, told Reuters in a telephone interview that Vedanta was keen to keep copper in its portfolio. (Reporting by James Regan; Editing by Muralikumar Anantharaman)

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