Oz Minerals to increase focus on copper, lifts forecasts

Oz Minerals is to prioritise the processing of copper ore versus gold as it bets on strong prices for the industrial metal.

Plant operator Sabrina McKenzie at the OZ Minerals copper mine at Prominent Hill. Pic: supplied

Oz Minerals says it plans to increase its focus on processing copper ore versus gold in the years ahead, betting on strong prices for an industrial metal used widely in manufacturing and construction.

Adelaide-based Oz Minerals (OZL) laid out its revised plans as it reported copper output fell and gold production rose on-year in the final quarter of 2016. Annual production of each metal met earlier company forecasts.

Oz Minerals said gold production totalled 32,205 troy ounces for the three months through December, up 2.1 per cent on a year ago, taking 2016 output to 118,333 ounces. That was in line with an earlier company estimate of 115,000-120,000 ounces.

Quarterly copper output totalled 29,758 tonnes, it said. That was down 8.8 per cent on-year.

Still, 2016 copper output of 116,882 tonnes was within an earlier projected band of 115,000-125,000 tonnes.

Production from its Prominent Hill mine in southern Australia was disrupted in the second half of the year, after a blackout cut power to the site. That resulted in 15 days of lost production, Oz Minerals said.

In the coming years, Oz Minerals will “prioritise copper given its stronger margins,” said chief executive Andrew Cole.

The miner reiterated its copper production forecast for 2017 of 105,000-115,000 tons, while increasing its 2018 projection to 90,000-100,000 tonnes from 85,000-95,000 tonnes.

It is also now forecasting copper production of 90,000-100,000 tonnes for 2019, up from an earlier estimate of 65,000-75,000 tonnes.

Meantime, the miner trimmed its gold output guidance for 2017 to 115,000-125,000 ounces, from 125,000-135,000 ounces. It expects to produce 120,000-130,000 ounces in both 2018 and 2019, down from prior forecasts of 140,000-150,000 ounces and 150,000-160,000 ounces, respectively.

Dow Jones Newswires