January 6, 2016 / 6:45 PM / 3 years ago

UPDATE 1-Canada's Imperial Metals latest to shutter some copper production

(Adds company comment, context)

VANCOUVER, Jan 6 (Reuters) - Canada’s Imperial Metals Corp on Wednesday suspended pit operations at its Huckleberry copper mine in British Columbia, becoming the latest in the industry to curtail production after a 50 percent slump in the metal’s price in the past five years.

Imperial said it would lay off 100 of its 260 workers at Huckleberry, retaining the rest to mill stockpiled ore.

Milling the stockpile is just a temporary measure expected to last around three months, Imperial spokesman Steve Robertson said.

He declined to speculate what would happen at the end of three months but did say the mine needed a “substantial” increase in the copper price and an additional drop in the value of the Canadian dollar before it could re-start pit mining.

A weaker dollar reduces costs and increases margins for miners, whose output is sold in U.S. dollars.

Vancouver-based Imperial has a 50 percent stake in the Huckleberry mine, with Mitsubishi Materials Corp, Dowa Mining Co Ltd, Furukawa Co Ltd and others owning the rest.

Robertson also declined to give a forecast for production from the stockpile. Imperial had forecast the Huckleberry mine would produce 44 million pounds of copper in 2015.

Robertson said Imperial had no plans to curtail operations at its other two copper mines, Red Chris and Mount Polley, which are both in British Columbia.

“Red Chris is a much lower-cost operation (than Huckleberry),” he said. “Mount Polley has a lot more leverage to pull as it has higher grade portions which provide a little more flexibility.”

Huckleberry is expected to have cash costs of $2.31 a pound in 2016, RBC Capital Markets analyst Sam Crittenden said in a note to clients.

Copper was last trading at $2.10 a pound.

Copper miners around the world, including big producers such as Freeport-McMoRan Inc and Glencore Plc, have been cutting production in recent months as worries about slowing demand from China fuels the biggest market rout in years.

Imperial’s shares were down 4 percent at C$6.33 on the Toronto Stock Exchange on Wednesday, in line with other copper miners as the metal’s price hit a two-week low. (Reporting by Nicole Mordant in Vancouver and Anet Josline Pinto in Bengaluru; Editing by Don Sebastian and Lisa Von Ahn)

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