First Quantum sees gains in copper price

[Clint]

First Quantum sees gains in copper price
Mon Aug 22, 2011 3:14pm GMT
By Chris Mfula
LUSAKA (Reuters) - The price of copper is likely to remain high over the next 12 months even as commodity prices fall on worries of a global economic slowdown, First Quantum Minerals president Clive Newall said on Monday.

Newall told Reuters by email that due to a fragile world economy, all commodity prices would be volatile over the next 12 months, with a higher likelihood of dropping.

"However, copper is an increasingly scarce element with ever rising costs of production and no signs of any significant new substitution possibilities," he said in reply to questions.

"So in my view, copper is likely to out-perform other base metals".

During the last global economic crisis at the end of 2008, copper plummeted to under $3,000 a tonne, dragging Zambia, Africa's biggest copper producer, into recession.

Benchmark copper was trading at $8,845 at 1130 GMT, up from Friday's close of $8,825 a tonne. It has fallen by about 10 percent since the end of July as fears mounted of debt troubles in the United States and Europe.

Newall, whose company mines metals in Zambia and Mauritania, said although a proposed electricity cost increase in Zambia would raise production costs, that would not alter First Quantum's investment plans.

Zambia's energy regulator said this month after approving a 30 percent hike in power costs for the mines the country should raise the price of power to cost-reflective levels by 2015.

"We are not contemplating any changes to our development plans at this stage," Newall said.

First Quantum was planning investments in Zambia of up to $2.5 billion over the next four years on top of the $1 billion already invested, he said.

http://af.reuters.com/article/investing ... C020110822