Sydney, June 18: The Broken Hill Pty Co Ltd's chairman Jerry Ellis said that the slump in copper prices may be at an end. ``I don't believe it can go much lower because at lower levels production would start to be shutdown," Ellis said."Copper may be at a bottom," he said in response to questions at a business lunch. BHP is the world's second largest copper producer behind Chile's Codelco.
The Melbourne-based energy and mining group has copper operations in Papua New Guinea, Chile, Peru and the United States. Copper prices have slumped to their lowest prices ever in some terminal markets in anticipation of a big world supply surplus emerging due to Asia's financial crisis.
Current prices of around $1,640 a tonne are down by nearly $1,000 from June 1997. BHP has been wrestling with high costs and other problems within its copper division since buying Magma Copper Co of the United States, where roduction costs at one point were around $0.85 a pound ($1,874/tonne), among the highest in theworld.
Low-cost operations at the flagship Escondida mine in Chile, 57.5 per cent-owned by BHP, have only partly offset higher costs elsewhere, BHP has said.
In the third quarter, BHP's copper division posted a loss of A$13 million versus a profit of A$145 million a year earlier.
Meanwhile, the company said it was still searching within the company and outside for a new chief executive to replace John Prescott.
"I am pleased with the progress we're making with the search process," BHP chairman Jerry Ellis told a Committee for the Economic Development of Australia (CEDA) luncheon.
"That includes both within the company and external to the company in Australia and around the world," Ellis said.
Asked if BHP was specifically looking for a candidate with expertise in the resources sector, Ellis said BHP had a broad range of activities and needed broad experience at the top.
``We are, at the moment and you could reasonably assume for quite some time, a company with many businesses, so breadth is morelikely to be the criterion than narrowness." BHP has otherwise lurched from one disappointment to the next over the last two years. Prescott quit two months ago after a series of cost blowouts and poor results shook investor confidence. BHP's share price has struggled ever since, partly because some investors and analysts are concerned BHP would appoint an internal candidate.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
