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The outlook for the metals markets remains uncertain with an estimated 80% of zinc and over 40% of copper producers losing money after sustaining capital expenditure is taken into account, Lundin Mining Corp. (LUN.T) said Thursday.
Lundin has itself suspended zinc output at its Neves Corvo mine in Portugal until prices recover, and said it will permanently shut its Galmoy zinc mine in Ireland from May. Its Storliden copper and zinc mine in northern Sweden was closed last year when it depleted its resources.
But Lundin said operating plans have been developed for Neves Corvo, its Zinkgruvan mine in Portugal and its Aguablanca mine in Spain, "that should see them free cash flow positive at today's prices."
"These will remain under active review during the year to adjust to changing circumstances," Lundin added. It core focus will now be on Neves Corvo, which remains a low-cost copper producer, as well as Zinkgruvan and the Tenke Fungurume copper-cobalt project, a joint venture in Congo. First copper production is expected from Tenke in the second quarter of 2009.
The company said metal prices are expected to stabilize during 2009, with some potential for minor increases. "The longer-term outlook for metal prices remains strong and supply difficulties are expected once world growth resumes," Lundin added.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com
(END) Dow Jones Newswires
02-26-09 1044ET
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