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Saudi copper output set to rise

JEDDAH — Saudi copper production is on the rise as demand mounts, though the metal’s price has been fluctuating lately in the international markets.

Three-month copper on the London Metal Exchange slipped to $7,772.25 a ton on Friday, down 0.7 percent from Thursday’s close of $7,826 a ton.

In China, the world’s largest consumer of copper, concerns remained about the outlook for demand which has remained sluggish this year, but traders did not expect to see a big sell-off.

Copper weakened in October, ending more than 5 percent lower on the month, as expectations that real demand for metals would improve failed to materialize.

For one, Australian mining firm Alara Resources has increased by 30 percent to 8.53 million tons at 0.64 percent copper the Measured and Indicated Copper Resource at its Khnaiguiyah Zinc and Copper Project in Saudi Arabia.

This follows a 30 percent increase to 25.33 million tons at 4.03 percent zinc and 0.16 percent copper for the Measured and Indicated zinc and copper Resource reported earlier this month.

The resource upgrade arose from over 93 additional drill holes in Zone 2 of the project and several thousand meters of new drilling in Zone 1 since the cut off date for determination of the maiden Resource announced in February 21st 2012.

Alara is upgrading the parameters of the Definitive Feasibility Study currently underway to reflect the increase in Khnaiguiyah’s production profile to an annual throughput of 2 million tons per annum from 1.5 million ton per annum. This increased throughput is likely to result in an increased annualized production profile to about 80,000 tons of zinc and 6,000 tons of copper.

Meanwhile, Barrick Gold Corp has cut its forecast for copper production next year due to delays at its Jabal Sayid project in Saudi Arabia, Chief Executive Jamie Sokalsky said earlier.

Sokalsky said Barrick, the world’s biggest gold miner, now expects its total 2013 copper output to be in the range of about 500 million to 550 million pounds, down from a previous forecast of 600 million pounds.

The company acquired Jabal Sayid as part of its C$7.3 billion ($7.5 billion) acquisition of Equinox Minerals in 2011.

“The safety and security standards of the mine were originally designed by Equinox to Western Australian standards, which differ to Saudi Arabia’s standards,” Sokalsky told the Denver Gold Forum, adding that the company was recently notified of the discrepancy by the Saudi government.

Because the mine does not comply with Saudi standards for safety and security, the company is restricted in its use of explosives and that will hinder its ability to mine the deposit, Sokalsky said.

“We expect to be in full compliance by 2014, but are working hard to achieve this earlier,” he said.

By 2015, Barrick’s copper output will be at about 650 million pounds, Sokalsky said.

Morreover, Ma’aden Aluminum Company has awarded Bechtel the feasibility study contract for its proposed copper and zinc smelter projects on the Arabian Gulf Coast. The multibillion-dollar projects are set to include the construction of two world-class smelters with an output of 500,000 tons of copper per year and an annual production of 200,000 tons of zinc.

“Our team in Saudi Arabia will bring a substantial amount of experience both in pyro-metallurgical processes and working in Saudi Arabia and Middle East region to this study,” said Russ Barretta, Bechtel’s Mining and Metals general manager for North America, Europe, and the Middle East. “We have built a strong relationship with the Ma’aden Aluminum Company in the last eight years of working on its aluminum smelter, Ras Al Khair, which will be the world’s largest aluminum smelter when completed in 2013.” Bechtel’s work on the studies for the copper and zinc smelter projects will be led by a team with strong experience in Saudi Arabia and the Middle East.

The Saudi Gazette 2012, Nov 04 2012

http://www.zawya.com/