BHP Cutting Copper Production

BHP Billiton Base Metals is extending its copper production cuts, following a determination of an absence of demand for more copper in the short term.

Late last year, in response to deteriorating market conditions, BHP Billiton Base Metals detailed a 170 000 metric ton reduction in copper production to be delivered in the form of a production cuts at Escondida, Chile, and the temporary closure of the sulphide operation at Tintaya, Peru.

The extension of production cuts removes another 80 000 metric tons of production from Escondida through this year. Combined with the previously announced 170 000 metric tons cut, this brings the total reduction in copper production to about 250,000 metric tons for the period of Nov. 2001-Dec. 2002.

Brad Mills, president of BHP Billiton Base Metals, said, "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 market conditions and review our operating strategy accordingly, midway through this calendar year."

At Tintaya, the sulphide operation, capable of producing 90,000 tpy of copper in concentrate, will remain closed until at least Jan. 2003.

At Escondida, the mine will continue at a reduced level through to at least the end of calendar 2002 and will take this opportunity to undertake optimizing modifications to the existing concentrator. The net result is that Escondida copper production for this year will be slightly less than last year, despite the start up of Escondida Phase 4 in September 2002.