UPDATE 1-China's Minmetals eyes new Australia copper mine Mon Jul 12, 2010 1:40am GMT
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* Reactivates open pit mine plan on improved market outlook
* New mine could yield 59,000 of tonnes of copper a year
* Project under review for board approval later this year (Adds detail)
SYDNEY, July 12 (Reuters) - China's Minmetals could develop a new open pit copper deposit at its Golden Grove zinc mine in Western Australia and has reactivated a study shelved during last year's financial crisis, the company's Australian subsidiary said on Monday.
Melbourne-based Minerals and Metals Group (MMG) has started a feasibility study into the development that could yield around 59,000 tonnes of copper metal annually from 240,000 tonnes of ore concentrate, it said.
Plans to construct the mine to supplement production from underground deposits at Golden Grove was put on hold by MMG in 2009, after commodities markets were drawn into the financial turmoil.
But recent improvements in commodities prices -- copper MCU3 is up about 10 percent over the last month alone -- have convinced MMG to take a second look at the plan.
Construction work will not begin until MMG's board reviews the feasibility study later this year and gives its approval, the company said.
MMG was formed in 2009 by Minmetals to acquire the majority of the zinc and copper mining assets of Oz Minerals (OZL.AX: Quote) and act as vehicle for acquisitions and organic growth in the sector.
Based on current guidance from MMG, Golden Grove is expected to yield 32,0000 tonnes of copper in concentrate in 2010 from the underground deposit.
With additional copper from the new open pit mine, copper output would surpass current zinc production of 80,000-85,000 tonnes per year. (Reporting by James Regan; editing by Balazs Koranyi)
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