US engineers Fluor Daniel are completing a six-month pre-feasibility study on the smelter, bankrolled by a $484,000 loan from the US Trade and Development Agency, said Daniel Perucca, development director at Argentina's Mining Department.

Interest in the smelter has been shown by big-hitting mining concerns such as Cyprus Amax Minerals and Phelps Dodge Corp of the United States, Belgium's Union Miniere and Argentina's conglomerate Techint, Fluor Daniel project manager Irshad Rana told Reuters.

Other firms to be invited to the presentation include Australia's MIM Holdings and Broken Hill Propietary Co Ltd (BHP), Luxembourg-based Minorco, Japan's Mitsubishi and Mitsui and Chile's state-owned Codelco, said Perucca.

The smelter would have initial production capacity of 175,000 tonnes of refined copper and525,000 tonnes of sulfuric acid, said Perucca.

But the smelter would need to ensure a supply of copper concentrates before the project could go ahead.

"I think the question is how many tonnes of concentrates the country is capable of producing taking into account future projects," said Hector Crespo, spokesman for the $1.2 billion Bajo de la Alumbrera copper-gold mine, Argentina's largest.Alumbrera already has medium and long-term contracts for up to 10 years with foreign smelters for most of its output, largely taking it out of the domestic concentrate supply loop, said Crespo.

He maintained concentrates would have to come from sources such as the $1.1 billion Agua Rica copper-gold project, due to open in 2002, and El Pachon. But the latter was recently shelved by Canadian miner Cambior Inc in reaction to slumping base metal prices. "Of course you have to look at these projects according to five or 10 years down the road," Rana said.

Argentina is a good candidate to build a smelter because of lowenergy costs and reasonable wages for the proposed operation's 580 staffers, Rana said.The government sees $3.49 billion worth of investment funnelling into Argentine mining between 1996 and 2000.

Alumbrera was built by Fluor Daniel for the mine's owners led by Australia's MIM. Fluor is also currently topping off work at Minorco's $270 million Cerro Vanguardia gold-silver mine in Santa Cruz province. The smelter would take four years to put into operation, including a final feasibility study, design and construction, said Rana.

Operating costs would be $37.5 million per year, and consortium members would see a 16.6 percent return on an investment divided equally between equity and debt, he said.