Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Poland’s largest ore miner KGHM Polska Miedz can verify four more viable mining pits in its flagship Sierra Gorda copper and molybdenum mine in Chile, vice president of the company’s management board for international assets Miroslaw Kidon said on Thursday.
“We can verify and identify another four pits, which are of similar size to our current pit,” said Kidon on a conference call.
He added that the company and a team of geologists suspected the newly identified pits might be in reality “one big super-pit”.
Sierra Gorda, in which the Polish miner holds a majority stake, produced nearly 19 thousand tonnes of payable copper in the first quarter, 21% less than in the same quarter last year.
Kidon explained that the decline was caused by a lower content of the metal in the ore, but underlined the company’s commitment to the mine.
“Sierra Gorda became our flagship project, we constantly work to improve financial results and value of this company…”, he said.
Another foreign mining operation that sustained a drop in its output was the Robinson copper mine in Nevada, US, whose quarterly output declined by an annual 63% to 5.3 thousand tonnes of payable copper.
The fall was mainly due to extreme weather conditions, including record high snowfall, whose melting led to flooding of the mine’s communication routes.
Kidon said he did not expect the mine to hit its yearly production goal, as the unit under which the mine operates has so far achieved only about 14% of its output target.
“At the moment, I can only say that we expect non-execution of budget production volume for Robinson,” he said.
He added, however, that it was too soon to make output predictions with certainty.
(By Mateusz Rabiega and Anna Banacka; Editing by Jan Harvey and Christina Fincher)
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