MELBOURNE, Oct. 26 -- China Minmetals Corp., the nation's largest metals trader, may revive a shelved plan to boost copper output at the Sepon mine in Laos by 23 percent.
The company's Melbourne-based Australian unit, Minerals and Metals Group, will review in the "near term" a project to boost copper production capacity to 80,000 metric tons a year, from 65,000 tons, it said today in an e-mailed statement.
An 80 percent rebound in metal prices this year has prompted producers to study reopening shuttered mines and boost output on optimism demand has rebounded from the worst global recession since World War II. Minmetals, which paid $1.39 billion for most of the assets of OZ Minerals Ltd. in June, may restart the Avebury nickel mine should prices improve next year.
"Once we are comfortable that the price is going to be steady around the $20,000 mark then that's when we will feel more confident," Andrew Michelmore, MMG's chief executive officer, told reporters today on a conference call. "When we look at the demand and the potential supply, we are still not comfortable that that price is going to sit at the level that we would need."
The price of nickel for three month delivery on the London Metal Exchange fell 0.8 percent to $18,995 a ton on Oct. 23.
Former owner OZ Minerals shut the mine in Australia's Tasmania state in December because of a slump in prices. Nickel has rebounded 62 percent this year as plants that make stainless steel, the biggest use of the metal, boost production.
Michelmore declined to comment on whether MMG is interested in acquiring BHP Billiton Ltd.'s mothballed Ravensthorpe nickel mine in Western Australia state. Bank of America Corp.-Merrill Lynch is helping the company study options for the mine, BHP said this month.
The previous cost estimate of $178 million for expanding capacity at Sepon will be reviewed, Michelmore said.