MIM to fast-track Mt Isa operations despite soft prices

The metals and coal miner announced yesterday that it planned to increase copper output at Mt Isa by 113,000 tonnes over the next four years to 400,000 tonnes a year.

The expansion follows an earlier commitment by MIM to double its coal production over the next five years.

It's the first tentative steps the company has taken to increase its core businesses after spending $2 billion and much of the past five years cleaning up its operations.

``This isn't just a growth story. This is a low-capital, asset-efficient brownfield growth aimed at further improving our margins across our commodity base," MIM chief executive Vince Gauci said.

``This growth strategy, we believe, will see MIM take another major step toward a complete restoration of the company as a truly internationally competitive resources company."

The announcement helped lift MIM shares 8c to $1.21.

MIM hopes to achieve the copper increase by fast-tracking the development of its open-cut orebody, which lies above the existing underground copper mine, and by better optimising mining operations.

MIM said the expansion plan followed a study which had generated a better understanding of the open-cut copper resource and identified opportunities to improve operating margins at its Mt Isa operations in Queensland.

MIM said several months ago that it intended to increase profits by expanding its core coal and copper businesses.

The company intends to boost copper production initially by 55,000 tonnes over the next two years by combining the mining of the two orebodies which make up its underground mine and by better utilising existing infrastructure.

It also plans to treat one million tonnes of stockpiled copper smelter slag.

The development of the open-cut resource will help the company meet its four-year expansion target of 400,000 tonnes, with the potential to then move on to annual production of up to 600,000 tonnes.

Mr Gauci said there was still significant potential for the open-cut resource to be further expanded as the company was continuing drilling to further define the resource.

``Our recent work has shown that we have over six million tonnes of contained copper metal still to be mined at Mount Isa which is in fact more than has been extracted over the past almost 60 years of copper mining," he said.

MIM didn't reveal any capex numbers on the expansion as it is still subject to the completion of a final feasibility study.

However, the company expects the cost to be minimal.

Analysts welcomed the expansion decision with Credit Suisse First Boston saying in a client note that ``it further highlights the strength of the operational franchise of the group".