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Copper Substitution Unlikely Despite High Prices -OZ Minerals CEO Burgess

Rio Tinto Sees Demand for Ore and Copper Doubling

SYDNEY, Feb 08, 2011 (Dow Jones Commodities News via Comtex) -- Demand for copper shows little sign of flagging as the metal hovers around record levels, the Chief Executive of South Australia-based copper-gold miner OZ Minerals Ltd. (OZL.AU) said Wednesday.
&quot;We don't really see a level&quot; at which copper becomes so expensive that consumers start to substitute lower-cost materials, Terry Burgess said on a conference call after the company's annual results.
&quot;You're still not seeing the supply side being fully met. We continue to read about delays in (mining) operations, projects not coming into production as soon as expected,&quot; he said.
The market is unlikely to come back into balance until large numbers of new projects start up, he said.
Three-month copper futures on the London Metal Exchange hit an intraday record of $10,160 a metric ton Monday, putting the metal at nearly four times the price of aluminum.
LME three-month copper closed yesterday at $10,060/ton, while aluminum ended at $2,565/ton.
Based on a rule of thumb in the metals markets, consumers will start substituting aluminum for copper whenever the copper-aluminum price ratio rises above 2.5-3.0.
OZ's Prominent Hill mine produced 112,171 metric tons of copper in 2010, equivalent to around 0.7% of the world's 2009 mined copper output, which the International Copper Study Group puts at 15.4 million tons. 
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