Mining companies cut costs

OZ Minerals is reviewing capital and operational expenditures to be sure it can fund all 'essential' projects.

OZ Minerals is reviewing capital and operational expenditures to be sure it can fund all ‘essential’ projects.

The move comes in light of volatile currency markets, low commodity prices and tight credit markets.

The company’s major development at Prominent Hill in South Australia will go ahead as planned with commissioning scheduled to begin next month.

A second autoclave for the Sepon copper plant in Laos is on site prior to commissioning, but the timing for all other projects is under review.

“By closely reviewing our commitments now, we will ensure that we are in the best possible position to maintain our financial position and enable future development of our projects to generate growing value for our shareholders,” managing director and CEO of OZ Minerals Andrew Michelmore said.

Statistics show that all metal prices have slipped in the last few weeks, prompting the closure of several mines and the postponement of projects across the industry.

Alcoa has announced it will be curtailing an additional 350,000 metric tonnes per year of aluminium production beginning immediately.

Last month the company curtailed production at its smelter in Texas.

Combined, the company’s curtailment efforts in the second half of this year are equivalent to 15% of the company’s annual output.

According to a statement released by the company, the additional cuts are necessary because of the lower end-market demand and global economic softness.

The cuts follow targeted cost reduction initiatives and will spread across the company’s global system.

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