MW: World No. 2 zinc miner reviews operations as metal prices fall
SYDNEY (REUTERS) -
Oz Minerals Ltd (OZL.AX), the world's second-largest zinc miner and a major supplier of copper, lead and nickel to China, is reviewing operations amid sharply lower metal prices and tighter credit markets, it said on Monday.
"The review will be ongoing and will focus on carefully managing cash balances, maximising free cashflow and ensuring that the company is able to fund all essential operating and project-related outflows," the company said in a statement.
Oz Minerals Managing Director Andrew Michelmore told Reuters last month the firm was considering a full or partial closure of its Century zinc mine in Australia, the world's second largest, because the mine was now operating at a loss.
He said he would also need to consider staff redundancy costs and other one-off expenses before making such a decision.
Development of Oz Minerals' long-promised Prominent Hill copper and gold mine in Australia is still scheduled to start up next month and expansion work at its Sepon copper and gold mine in Laos is also on track, the statement said on Monday.
"However, the timing and structure of all other projects is under review," it added.
"By closely reviewing our commitments now, we will ensure that we are in the best possible position to maintain our sound financial position and enable future development of our projects to generate growing value for our shareholders," it added.
Oz Minerals is the second-largest zinc miner behind Canada's Teck Cominco (TCKb.TO). It also sells nickel to Chinese metals group Jinchuan and ships copper from its Laos mine to markets in Southeast Asia.
Last month, the firm said costs at its Century mine were running at around $0.69 a pound, compared with selling prices of around A$0.52 a pound on the London Metal Exchange MZN3.
The mine yielded 129,241 tonnes of contained zinc along with 17,846 tonnes of contained lead in the September quarter.
Oz Minerals has already said it is cutting output from another mine, Golden Grove, by as much as 40 percent next year to between 80,000-85,000 tonnes.
Nickel is used to give stainless steel shine, while zinc is employed as an anti-corrosive in galvanising steel. (Reporting by James Regan, editing by Mark Bendeich)
