Extends Copper Prod Cuts
BHP Billiton Limited
28 May 2002
BHP Billiton Limited is issuing this announcement to fulfil disclosure
obligations arising from its secondary listing on the London Stock Exchange.
The text of this release is identical to that issued by BHP Billiton Plc
earlier.
28 May 2002
Number: 31/02
BHP BILLITON EXTENDS COPPER PRODUCTION CUTS
BHP Billiton Base Metals today announced it would extend the copper production
cuts announced by the Group last year, following a market review that
determined an absence of market demand for additional copper in the short term.
On November 8 2001, in response to deteriorating market conditions, BHP
Billiton Base Metals detailed a 170 000 tonne reduction in copper production to
be delivered in the form of a constrained production program at Escondida, and
the temporary closure of the sulphide operation at Tintaya.
The extension of the production cuts effectively removes an additional 80 000
tonnes of copper production from Escondida through the end of this calendar
year. Combined with the previously announced 170 000 tonne cut, this brings the
total reduction in copper production to approximately 250 000 tonnes for the
period of November 2001 through December 2002.
President BHP Billiton Base Metals, Brad Mills, today said: 'It has become
apparent that although total world copper production has decreased, demand has
failed to pick up substantially. Stocks have continued to grow at a significant
rate through the first half of the year. On May 15, 2002, combined
LME-COMEX-Shanghai stocks stood at 1 493 392 tonnes compared to warehouse
stocks of 985 549 tonnes on November 9, 2001, when the original production cuts
were announced.'
Mr Mills continued: 'Although leading indicators suggest that demand should
begin to improve, the current physical market continues to be weak. At the time
of announcing the original production cuts, it was made clear we would continue
to monitor the market conditions and would review our operating strategy
accordingly, midway through this calendar year.'
At Tintaya, the sulphide operation, which is capable of producing 90 000 tpa of
copper in concentrate, will remain closed until at least January 2003. BHP
Billiton will continue to mitigate the impact of the temporary closure on the
workforce through the extension of partial employment arrangements.
The Tintaya oxide plant, which commenced commissioning in April 2002, will
continue to produce high quality, low cost cathode at the rate of 34 000 tpa.
At Escondida, the mine will continue its constrained operating strategy through
to at least the end of calendar 2002 and will take this opportunity to
undertake optimising modifications to the existing concentrator. The net result
is that Escondida copper production for calendar 2002 will be slightly less
than calendar 2001, despite the start up of Escondida Phase 4 in September
2002.
Mr Mills said: 'Looking forward to calendar 2003, if market conditions warrant,
BHP Billiton will be in a position to respond to real increases in demand by
operating Escondida and Tintaya at full capacity. Post Phase IV commissioning,
Escondida's capacity will increase to 1.2 Mtpa over the next 5 years, and
Tintaya's capacity including cathode production, will increase to 124 000 tpa.
'To meet medium term demand, we continue to advance the final phases of the
expansion of Escondida, through the Norte and Sulphide Leach projects. These
expansions will be managed to maintain Escondida production at approximately
1.2 Mtpa for many years to come.'
BHP Billiton Base Metals will also continue to expand its production base as
the market allows. The Spence project is one of the most attractive major
developments currently available today and will result in an additional 210 000
tpa of copper cathode with a C1 cost of around 35c/lb.
Further information can be found on our Internet site: http://www.bhpbilliton.com
Australia United Kingdom
Andrew Nairn, Investor Relations Mark Lidiard, Investor & Media Relations
Tel: + 61 3 9609 3952 Mobile: +61 408 313 259 Tel: +44 20 7747 3956
email: Andrew.W.Nairn@bhpbilliton.com email: Mark.Lidiard@bhpbilliton.com
Mandy Frostick, Media Relations
Tel: +61 3 9609 4157 Mobile: +61 419 546 245
email: Mandy.J.Frostick@bhpbilliton.com
United States South Africa
Francis McAllister, Investor Relations Michael Campbell, Investor & Media Relations
Tel: +1 713 961 8625 Mobile: +1 713 480 3699 Tel: +27 11 376 3360 Mobile: +27 82 458 2587
email: Francis.R.McAllister@bhpbilliton.com email: Michael.J.Campbell@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
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Registered Office: 600 Bourke Street Melbourne Victoria Registered Office: 1-3 Strand London WC2N 5HA United Kingdom
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