mim---big sell off, page-2

MIM struggling to make a profit

Brought to you by
BRISBANE

MIM Holdings Ltd said it would struggle to make a profit in the first half even before booking a loss from the sale of its German zinc smelter.

MIM chairman Leo Tutt said the current commodity price environment was extremely poor.

He told the resources company's annual general meeting that prices in Australian dollar terms had deteriorated in the current year.

Comparing Australian dollar prices for the September quarter this year with the December half last year, the prices for MIM's products were down except for coking coal, gold and silver, he said.

Copper was down two per cent, zinc nine per cent, lead 15 per cent and thermal coal 26 per cent.

"We continue to drive production, cost and sales performance across our operations to compensate as much as possible for lower prices," Mr Tutt said.

"This is enabling us to maintain profitability in our coal and copper operations.

"However, our lead-zinc mining operations are not profitable at these prices and the European zinc smelters, which have also been hit by the stronger Euro and Pound, are expected to incur total losses after tax of around $50 million for this half which does not include the previously announced loss in relation to exiting the Duisburg smelter," he said.

"In the current December half year, before we book the estimated $68 million loss from the Duisburg transaction, we will struggle to make a profit unless prices improve," Mr Tutt told shareholders.

"While this is a very tough half year, the operational fundamentals are sound in our copper, coal and lead-zinc businesses.