Copper market’s biggest whale fuels speculation of a major shift
The world’s single biggest buyer of copper, State Grid Corp. of China, has slowed its purchases of copper wire this year.
Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) today reported net income of $71.2 million ($0.12 per share) for the first quarter of 2011, an increase of $19.3 million from the $51.9 million ($0.09 per share) for the first quarter of 2010.
“Production for the quarter was in-line with guidance and our production outlook for the year is unchanged. It should be noted however, that the production has come at a higher cost owing to lower than expected average head-grade at Neves-Corvo and milling difficulties caused by wet weather in January,” said Phil Wright, President and CEO. “Caution also needs to be exercised on cost outlook given the on-going weakness of the US dollar.”
“Given the strong copper price, the increase in net income is less than we would have liked and has been affected by suspension of operations at Aguablanca and by shipping disruptions at quarter end resulting in sales tonnages being well below production for the quarter.
“On the Tenke front, we are pleased with receipt of the Presidential Decree that formalizes the conclusion of the contract review process by the DRC government. This now clears the way for consideration of further development of this outstanding asset,” Wright said.
Commenting on developments on the corporate front, Mr. Wright said, “This has been an eventful period resulting in an active review of alternatives to bring value to Lundin Mining shareholders while at the same time focusing on keeping our mines operating safely and efficiently and delivering on our production targets.
“The review process is well underway and we will keep the market informed of any material developments.”
As has previously been announced, the company is currently undertaking a strategic review of alternatives to maximize value for shareholders. This may or may not result in a corporate transaction and there are no assurances that any proposed transaction resulting from the review process will be completed.
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