UPDATE 2-Oz Minerals sees $66 mln charge, eyes on asset sales

* Oz Minerals yet to sell mines as repayment deadline looms

* Sees A$100 million H2 charge as metals prices crumble

* Considers equity raising in quest for cash

(Adds details, CEO quotes)

By James Regan

SYDNEY, Jan 30 (Reuters) - Oz Minerals Ltd (OZL.AX), struggling to sell off mines and refinance debt, will take a A$100 million ($65.5 million) charge for the second half due to negative price adjustments caused by falling metals prices.

Chief Executive Andrew Michelmore said the additional cost comes as discussions accelerate with potential buyers for assets across Australia, Southeast Asia, North America and North Africa that must be in place by Feb. 27 to meet a repayment deadline imposed by its lenders.

Failure to make the payment could force Oz, whose shares have not traded since late November, into bankruptcy. It is the world's second-biggest zinc miner behind Canada's Teck Cominco (TCKb.TO) and also owns, copper, gold and nickel mines.

"It's a moving feast by the day, but we are progressing many players through the various operations," Michelmore told reporters on a conference call. "We're working with the banks to get through this period."

He said metal prices may finally be stabilising, after falling dramatically over the past year, as metal inventories recede, making Oz Minerals' assets more attractive.

Michelmore wouldn't rule out issuing more shares to help bring in cash, a process gaining popularity among mining companies worldwide as economic conditions continue to deteriorate and debt levels swell.

Giant Rio Tinto Ltd/Plc (RIO.AX)<RIO.L is struggling to sell $10 billion in assets this year ahead of a $8.9 billion payment due in October and is considering a share issue analysts suggest could raise $7 billion.

Xstrata (XTA.L) the world's fifth-biggest diversified mining group by market value, on Thursday announced a heavily discounted two-for-one rights issue to raise $5.79 billion. [nWLA6152]

None of Oz Minerals' assets were off limits, though "we're not going to sell anything for peanuts," Michelmore said.

Zinc output from its flagship Century zinc mine in Australia, where production costs are higher than selling prices, slipped 3 percent to 125,333 tonnes in the fourth quarter from the previous quarter in line with plans to better balance supply with demand.

Copper production from its Sepon mine in Laos fell 8 percent to 16,156 tonnes over the previous quarter.