For MIM, its current costs represents more than a 25 per cent drop from the 80-cent plus cost structure of the early 1990s. Meanwhile, a host of smaller companies, employing SX-EW (solvent extraction electrowinning) technology that bypasses the smelting stage, are boasting costs as low as 30 cents a pound.

All up, refined copper output in Australia should rise by about 44 per cent to 410,000 tonnes in the year to June 30, 1999, Australian Bureau of Agricultural and Resource Economics (ABARE) figures show.

The bulk of the gains will be generated by an expansion of MIM's Townsville refinery to 250,000 tonnes from 175,000 and WMC'ssmelter upgrade to take capacity to 200,000 tonnes from 80,000. Both expansions coincide with boosts to mine output.

Analysts have been calling for producers around the world to cut their copper output to combat a growing supply overhang that has pummelled prices.

"With the copper market now clearly in surplus, and with little prospect of that changing in 1999 given our demand outlook, the potential for further supply-side rationalisation in the coming months is a critical issue," said JB Were & Son analyst Malcom Southwood in a report.

After months of speculation, high-cost miner Highland Valley Copper of Canada on Monday threw in the towel and said it will cease operating May 15.

But an anticipated loss of 100,000 tonnes of copper due to the closure was insufficient to light up prices.

Said analyst Nick Moore of Flemings Global Mining Group in London: "In no way does this approach balancing the market - what it does do, however, is it helps to stop the rot."

Spot copper ended COMEX trading onTuesday little changed at less than 67 cents a pound, near the lowest price in a decade.

"But even at 66 cents (a pound) copper, the Australians are looking better than some," said Robert Nachum, managing director of research group Minalysis.

It is doubtful many companies would have expected copper prices to have fallen so far and the effect on Australian producers has been a big bite out of profits.

But lower prices have also been a driver to increase plant throughput and create a better cost structure.

"A down period is when you look to cash flows and to keep the ball rolling so you can be in a good position when markets change," said Bob Way of AME Mineral Economics.

At Mt Gordon in Queensland, Western Metals Ltd hopes to boost cathode output to around 50,000 tonnes from 7,000. Cash costs at the SX-EW mine are estimated in the mid 30-cent range.

Fellow SX-EW miner Straits Resources Ltd operates under a similar cost structure. JB Were's Southwood estimates the median global cash cost forproducing copper was 54.5 cents a pound last year.

Australian exports of cathode this year are also expected to rise in line with higher production. Analysts said this could force premiums paid for cathode at major Asian destinations lower.

"With all this new found copper around, we could see premiums down in the thirties ($30 a tonne)," said a metals trader in Sydney.

London-based analyst Richard Wilson of industry consultants Brook Hunt said the situation will be compounded by the 200,000-tones-a-year Gresik smelter in Indonesia readying shipments into Asia, with the first boatloads arriving next month.

A scheduled re-start in June of the Port Kembla, Australia, copper smelter by a Japanese consortium at a cpacity rate of 120,000 tonnes a year will only inject more metal into Asia, Wilson said.

"The Asian market in terms of premia and pricing is going to become a very different market to operate in simply because there is far too much metal chasing far too little consumption at present," Wilsonsaid.

This could be one reason why Japan's Nippon Mining and Metals Co is planning negotiations to acquire LG Metals Corp's copper smelter in South Korea.

"It makes them a very powerful force in the region," Wilson said. Nippon Mining confirmed on Tuesday it was planning talks with LG.