Multinational miner Glencore Xstrata might axe a $110 million expansion project at a NSW mine after dismissing its contractor.
Barely two weeks after Australia's top commodities agency said investment in the resources industry had peaked and was set to decline, Glencore fired the contractor it hired to expand a mine near Cobar.
When asked if the contract termination was the precursor to cancelling the project, Glencore's local representatives said: ''The company is considering its options with regard to the project.''
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While Glencore will now review the project, operations at the existing Cobar mine - where more than 300 people work - are expected to continue as normal for now.
Glencore appears to have longer-term ambitions for the region, having scooped up exploration territory nearby and a stake in ASX-listed minnow YTC Resources, which also has ground nearby.
Comment: Depending on - Hera / Nymagee getting bigger, - Federation driling underway, - how the CoCu find pans out, YTC might be able to deliver enough ore to Glencore make up most of the future shortfall at CSA and keep Glencores plant busy until their own new projects move forward ... could be that Glencore is willing to wait for what we find (and how copper prices move) before deciding how to proceed with CSA ...
We might even see Glencore giving us incentives to move forward with Phase II faster than expected ...
YTC Price at posting:
20.0¢ Sentiment: Buy Disclosure: Held
