OZ Min chief Terry Burgess expects copper prices to remain high Cynthia Koons From: The Australian September 11, 2010 12:00AM
OZ Minerals chief executive Terry Burgess expects copper to remain elevated for the next five years or so.
Copper has recently been trading around four-month highs and many mining companies are operating at maximum capacity.
"Assuming demand from China and India continues, there will be a continued supply shortage (to support prices)," he said at a Bank of America-Merrill Lynch Australian investment conference in New York.
"We should see the copper price remaining around $US3 for some time to come."
Copper for December delivery settled on Thursday at $US3.4435/lb, down US5.7c or 1.6 per cent, on profit-taking on futures that have been higher since June on the Comex division of the New York Mercantile Exchange.
The benchmark contract has traded recently in a narrow range as traders consider whether moves higher than $US3.50/lb are sustainable given the sluggish economic recovery.
When some prospective new mines begin operating at full capacity, copper supply could normalise, Mr Burgess said, but he did not expect that to happen for another five or so years.
As for what the group will do with the $1.43 billion cash on its books at June 30, he said management was looking at deals that made sense, but the group would remain disciplined in its approach to acquisitions. "I think shareholders were initially concerned we were going to do something that wouldn't add value," he said.
OZ Minerals took a 19.9 per cent stake in Sandfire Resources in July, but did not buy the company outright because "we are still not 100 per cent certain of the full potential of this deposit".
As for a pick-up in acquisition activity in the resources sector, Mr Burgess said he was "sure there "will be people looking at everything and I'm sure people are looking at us".
