Australia Base Metals Production Down In 2010, Recover In 2011-Abare-Shanghai Metals Market

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Australia Base Metals Production Down In 2010, Recover In 2011-Abare

Industry News 09:04:23AM Jun 22, 2010 Source:SMM

SYDNEY, June 22 -- Australia's production of base metals has fallen during 2010 due to the after-effects of the financial crisis and project problems but will recover in the year to June 2011, the Australian Bureau of Agricultural and Resource Economics said Tuesday.

Abare saw aluminum production down 3% in 2010, nickel down 11%, copper falling 10%, and zinc down 6%.

Of the base commodities surveyed, only aluminum's precursor alumina saw production rise, climbing 3% to 20.1 million metric tons thanks to increases in production at refineries in the Northern Territory and Queensland.

The failure in October 2009 of the main haulage shaft at BHP Billiton Ltd.'s (BHP.AU) Olympic Dam mine, combined with lower production at Xstrata Plc's (XTA.LN) Ernest Henry mine, pared overall production of copper to 799,000 tons over 2010, Abare said.

That offset increases from the start-up of OZ Minerals Ltd.'s (OZL.AU) Prominent Hill and Newmont Mining Corp.'s (NEM) Boddington projects.

However, over 2011 the recovery at Olympic Dam and further ramp-up of Boddington would see production increasing 17%.

The Olympic Dam failure was also blamed for a 28% fall in refined copper production to 358,000 tons in 2010, and its recovery should see the figure climb back to 471,000 tons in 2011.

The strong rise in the Australian dollar and the fall in volumes would mean that despite the recovery in the copper price, the value of exports will fall 2% to A$5.7 billion in 2010 before increasing marginally to A$5.8 billion next year.

Changes in production levels at local smelters, particularly Alcoa Inc.'s (AA) Portland smelter, would see aluminum production down 3% to 1.9 million tons in 2010 but back up 2% at 1.95 million tons in 2011.

But alumina--the feedstock for smelters--production would rise 3% to 20.1 million tons in 2010 and a further 6% to 21.4 million tons in 2011.

Most of that increase will be exported, with total alumina exports up 7% at 17.6 million tons in 2011 and the value rising 20% to A$5.8 billion.

The crash in nickel prices at the end of 2008 and start of 2009 meant that much of Australia's nickel projects were closed down, with production dropping 11% to 164,000 tons in fiscal 2010.

That will climb back to 172,000 tons next year, thanks in large part of Mincor Resources NL's (MCR.AU) decision to restart its Miitel mine.

Nickel exports will rise 7% in 2010 to 207,000 tons, and the strong recovery in nickel prices would see their value climb 39% to A$3.8 billion.

Zinc would follow the same pattern of declines in 2010 largely rubbed out in 2011, with a fall of 6% to 1.3 million tons this fiscal year rebounding 7% to 1.4 million tons in 2011, thanks to ramp-ups in production.

Refinery production will hold steady at around 500,000 tons this year and exports will fall 2% to 2.1 million tons but the higher prices will increase their value to A$2 billion.

 

 
 

Australia Base Metals Production Down In 2010, Recover In 2011-Abare

Industry News 09:04:23AM Jun 22, 2010 Source:SMM

SYDNEY, June 22 -- Australia's production of base metals has fallen during 2010 due to the after-effects of the financial crisis and project problems but will recover in the year to June 2011, the Australian Bureau of Agricultural and Resource Economics said Tuesday.

Abare saw aluminum production down 3% in 2010, nickel down 11%, copper falling 10%, and zinc down 6%.

Of the base commodities surveyed, only aluminum's precursor alumina saw production rise, climbing 3% to 20.1 million metric tons thanks to increases in production at refineries in the Northern Territory and Queensland.

The failure in October 2009 of the main haulage shaft at BHP Billiton Ltd.'s (BHP.AU) Olympic Dam mine, combined with lower production at Xstrata Plc's (XTA.LN) Ernest Henry mine, pared overall production of copper to 799,000 tons over 2010, Abare said.

That offset increases from the start-up of OZ Minerals Ltd.'s (OZL.AU) Prominent Hill and Newmont Mining Corp.'s (NEM) Boddington projects.

However, over 2011 the recovery at Olympic Dam and further ramp-up of Boddington would see production increasing 17%.

The Olympic Dam failure was also blamed for a 28% fall in refined copper production to 358,000 tons in 2010, and its recovery should see the figure climb back to 471,000 tons in 2011.

The strong rise in the Australian dollar and the fall in volumes would mean that despite the recovery in the copper price, the value of exports will fall 2% to A$5.7 billion in 2010 before increasing marginally to A$5.8 billion next year.

Changes in production levels at local smelters, particularly Alcoa Inc.'s (AA) Portland smelter, would see aluminum production down 3% to 1.9 million tons in 2010 but back up 2% at 1.95 million tons in 2011.

But alumina--the feedstock for smelters--production would rise 3% to 20.1 million tons in 2010 and a further 6% to 21.4 million tons in 2011.

Most of that increase will be exported, with total alumina exports up 7% at 17.6 million tons in 2011 and the value rising 20% to A$5.8 billion.

The crash in nickel prices at the end of 2008 and start of 2009 meant that much of Australia's nickel projects were closed down, with production dropping 11% to 164,000 tons in fiscal 2010.

That will climb back to 172,000 tons next year, thanks in large part of Mincor Resources NL's (MCR.AU) decision to restart its Miitel mine.

Nickel exports will rise 7% in 2010 to 207,000 tons, and the strong recovery in nickel prices would see their value climb 39% to A$3.8 billion.

Zinc would follow the same pattern of declines in 2010 largely rubbed out in 2011, with a fall of 6% to 1.3 million tons this fiscal year rebounding 7% to 1.4 million tons in 2011, thanks to ramp-ups in production.

Refinery production will hold steady at around 500,000 tons this year and exports will fall 2% to 2.1 million tons but the higher prices will increase their value to A$2 billion.