Friday, September 20, 2019

Cebu miner hopes to maintain growth amid low copper prices

WITH copper prices expected to continue to trade sideways, Cebu-based Carmen Copper Corp. (CCC) hopes to simply maintain production volumes and revenue growth levels this year.

Officials said the company is positioning for a stronger commodity market by improving operational efficiencies and keeping costs down.

Enrico Nera, CCC president and chief executive officer, said prices of metal, including copper, historically run a seven-year cycle. Prices are currently at the low end and are expected to recover in 2019.

"That's why it's imperative that the mines are ready to produce once the prices improve," Nera said in a press conference following the Annual Mine Tour organized Friday by the Mines and Geosciences Bureau at the company's copper mines in Toledo City, over 50 kilometers west of Cebu City.

Roy Deveraturda, vice president for safety, health, environment and external affairs, said this year's production target hardly differs from the current daily level of about 42,000 dry metric tons (DMT). Revenues are also expected to be flat.

“If we produce more while prices are low, prices will go down further. The strategy is to maintain that (production) for a while until prices of commodities, including copper, improve. Hopefully, prices will start to improve next year,” Deveraturda said.

The company targets to increase copper ore production to 50,000 DMT a day by 2019, "and that will translate to a substantial increase in revenues," he added.

Production volume at the Carmen Pit, the only active pit among three mineral deposits in Toledo, was reduced to about 40,000 DMT at 0.2% head grade a day from its rated capacity of 60,000 DMT because of depressed copper prices.

In the first quarter of this year, Carmen Copper's parent firm Atlas Consolidated Mining and Development Corp. reported a 41-percent decline in production to 17.55 million pounds (lbs.) of copper metal.

As a result, Atlas Mining reported a higher consolidated net loss of P211 million for the period. The lower volume also brought the average cost per pound to $1.75/lb from $1.32/lb a year ago.

Nera noted that average copper price went down to about $2.11/lb in the first quarter of 2016 from $3.11/lb in 2014.

Atlas Mining noted that metal prices have started to improve, with average copper price increasing to $2.63/lb. in the first quarter of this year and gold price improving by 2% to $1,225 per ounce (oz) in the first quarter of this year from $D1,198/oz in the same period last year.

Despite the challenges posed by depressed copper prices, Nera said Carmen Copper has been able to contribute to the revival of economic activities in Toledo, a third-class component city in Cebu.

The city saw an economic boom until 1994 when Atlas, which started operations in 1953, shut down the mines due to labor problems. Carmen Copper, its wholly-owned subsidiary, resumed mining operations in Toledo in 2008.

Citing a letter sent by Toledo City Mayor John Henry "Sonny" Osmeña to the Department of Environment and Natural Resources audit team last year, Nera said poverty incidence in Toledo was reduced to 18.9% in 2012 from 34.3% in 2006, when the mines were still undergoing rehabilitation.

The company has created jobs for the locals. As of last week, Carmen Copper has 2,478 employees, about 80% of whom are Toledo residents. (SunStar Philippines)


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