Southern Copper CEO: Copper Seen Averaging $4/Pound In 2012

Nov 04, 2011 LIMA (Dow Jones)--Southern Copper Corp. (SCCO, SCCO.VL) Chief Executive Oscar Gonzalez Rocha said Friday he expects copper prices to average about $4 a pound in 2012.

Copper prices reached highs earlier this year, but tumbled in the third quarter on concerns that the global economic outlook would lower demand in China, the world's biggest metals consumer.

Gonzalez Rocha told reporters on the sidelines of a conference Friday that demand from China is expected to remain strong. He said that prices for the red metal would also be supported when the economic problems in Europe are resolved.

Friday, copper was trading at around $3.58 per pound.

Southern Copper is one of the world's biggest producers of the metal. It operates mines, smelting and refining facilities in Mexico and Peru.

In Peru, the company has faced opposition to the development of its Tia Maria copper project from local communities concerned about its use of water.

The government rejected Tia Maria's environmental impact study in April following violent clashes between protesters and police.

Gonzalez Rocha said that if the conflict is resolved in the first months of 2012, then Tia Maria could still be on track to enter production by late-2013 as construction is scheduled to take 18 months.

Tia Maria, which is seen producing 120,000 tons of copper a year, will require an investment of $934 million.

Meanwhile, Gonzalez Rocha said that protests in the northern Cajamarca region against Newmont Mining Corp.'s (NEM) Minas Conga gold and copper project have not affected Southern Copper's nearby Tantahuatay mine, where operations began in August.

Tantahuatay is slated to have average annual production of 90,000 ounces of gold and 425,000 ounces of silver in its first five years of operation.

Southern Copper has a 44.2% interest in the mine, while Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) also has a stake.

Protesters in Cajamarca want Minas Conga to be suspended, citing concerns about the project's potential environmental impact.

Minas Conga is Peru's biggest mining project and will require an investment of $4 billion to $4.8 billion.

Southern Copper is majority-owned by Grupo Mexico (GMEXICO.MX).