‘Zambian mines faces copper price risk’

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CopperMine REUTERS

Lusaka - Zambian mines are still operating profitably despite the fall in copper prices but could be threatened if the price dropped below $5,000 per tonne, Mines Minister Christopher Yaluma said on Saturday.

Copper markets have been edgy over slowing Chinese demand and fears that credit upheaval in the world's second-biggest economy could unwind financing deals using the metal as collateral.

Benchmark three-month copper on the London Metal Exchange has been falling steadily since January and sank to a 44-month low of $6,376.25 on Wednesday.

“Whatever they are making now is within very profitable levels. The worst case scenario they have planned for is falls below $5,000 and I don't think prices will reach that level,” Yaluma told Reuters.

“They would only be threatened if prices fell well below $5,000.”

Zambia produced 915,773 tonnes of the red metal between January and November 2013, up from 755,359 tonnes in the corresponding period of 2012.

Exports of the metal are a key supplier of Zambia's hard currency and the falling prices have brought the local kwacha currency tumbling nearly 10 percent so far this year.

Analysts polled by Reuters in January expect global surplus stocks of copper to tighten significantly this year and next as new mine output fails to translate into refined metal. - Reuters

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