bhp finds 1 billion tonne copper resource

BHP Billiton announces massive copper find in ChileFont Size: Decrease Increase Print Page: Print Sarah-Jane Tasker | July 23, 2008
MINING giant BHP Billiton has announced a new copper find near its Minera Escondida mine in northern Chile.

The find is a vein that is estimated to yield at least one billion tonnes of the valuable metal.

“In order to properly and rapidly evaluate identified exploration targets, decisions were recently made to aggressively expand the exploration and development drilling program in the area,” the company said.

The new Pampa Escondida project, as it is called, was discovered during extensive exploration of the area in recent years, it said.

“Drilling to date suggests that Pampa Escondida contains at least one billion metric tonnes of porphyry style mineralisation,” the report added.

Chile is the world’s biggest producer of copper, which is used for electrical wiring and plumbing.

The new find was announced as the miner also released production results showing it overcame supply disruptions and increased costs to register record production for seven of its commodities.

To listen to The Australian's Matt Chambers on the production report, click on Boardroom Radio.

BHP (ASX: BHP), which is still working on its $US170 billion ($177 billion) hostile takeover bid of rival Rio Tinto (ASX: RIO), also said in its quarterly report that annual production was significantly up in 13 commodities.

“This was achieved in an environment in which supply disruptions and input costs pressures are placing challenges on the industry response to continued strong global demand for commodities,” BHP said.

Despite the strong production results, BHP shares fell 55 cents, or 1.41 per cent, to $38.45 in early trading.

By late afternoon, BHP shares had recovered somewhat, and were down 0.21 per cent at $38.92. The benchmark S&P/ASX 200 Index was up 2.22 per cent.

BHP also unveiled record shipments in iron ore and manganese, at a time when pricing reached unprecedented levels and demand outlook remained strong.

Western Australia Iron Ore, BHP said, was expected to produce 137 million tonnes in the new financial year.

The commodities sector continued to benefit from increases in demand and prices from China in the year to June 30, and BHP recorded an 8.9 per cent increase in its shares in the period, while the benchmark S&P/ASX 200 dropped 17.7 per cent.

Rio didn’t jump as high as its rival, but was still strong, climbing 1.2 per cent over the same period.

In its report, BHP also said copper had registered a record 19 per cent increase in annual production over the March 2008 quarter, its third consecutive annual production record.

“In addition, Olympic Dam performed at the highest level since WMC acquisition, with the build up of underground stockpiles progressing according to the development program,” the miner said.

Nickel production for the year to June 30 was affected by industrial stoppage at Cerro Matoso in Colombia, wet weather interruptions at Yabulu and scheduled maintenance across all operations.
But BHP said the disruptions were offset by strong production from the Kwinana Nickel Refinery and the continued ramp up of Ravensthorpe and the Yabulu expansion project.

BHP announced earlier this month that it had matched Rio Tinto on iron ore prices by nearly doubling the figure, ending months of talks with steelmakers.

The Aussie miner secured a 96.5 per cent increase for iron ore lumps and a 79.88 per cent increase for refined ore from China’s Baosteel and will introduce these price-rises to other customers in Asia.

Additional reporting: AFP