sgw / cabot review - gip status, page-12

re: cso1 you have the wrong horse/????? Or is it the wrong analysis of the situation Sabre?

Zinifex warns of lower metals output,higher costs
Tuesday October 25, 2005, 10:10 am

SYDNEY, Oct 25 (Reuters) - World number two zinc producer Zinifex Ltd. (ASX: ZFX.ax) said on Tuesday its smelter output fell 6 percent in the September quarter, and it now believes high metals prices can no longer fully outweigh external cost pressures.

"Operating costs remain under pressure as a result of high global oil prices and the resources boom," Chief Executive Greig Gailey said in a statement.
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Gailey said earlier this month that strong metals prices would outweigh persistent cost pressures, at least in the medium term.

Also, while prices for zinc and lead, which Zinifex also mines and refines, were up sharply in the last quarter, a one to two month lag in getting material to market meant that the full effect of the increases would not be seen until the end of the current quarter, he said.

The decline in metal production was caused by planned maintenance shutdowns at the company's Port Pirie, Budel and Clarksville smelters, as well as a delayed restart at Port Pirie and a power outage at Budel, Gailey said.

"Budel had a difficult month in September, which resulted in zinc production for the quarter being approximately 10 percent below the comparative quarter last year and the June quarter," Gailey said.

World prices for zinc MZN3 have risen by about 20 percent in the past 12 months to about $1,490 a tonne. But miners are also facing input cost pressures, particularly for fuels and electricity to run operations. Only Canada's Teck-Cominco TEKsvb.TO produces more zinc.

Zinifex shares have doubled since January, closing a $4.67 on Monday on the back of the strengthening zinc price. ($1=A$1.33)