The Philippines’ second largest miner, Atlas Consolidated (AT.PS), has shipped its first copper concentrate to China at a whopping US$7,600 per tonne, or more than double current prices, a company excecutive said on Tuesday.
The company had hedged the metal at a price that is eye-catching at a time when metal prices have fallen sharply from last year’s record highs and global economic turmoil has made it tough for mining companies to secure credit.
The first consignment of 5,626 metric tonnes of copper concentrate was shipped to Qingdao port in China on December 29 for processing as part of a supply deal with Swiss firm MRI Trading, said Martin Buckingham, Atlas’s chief financial officer.
“This is the first of several shipments,” Buckingham told Reuters in a telephone interview.
Copper stood at US$3,330 per tonne on the London Metal Exchange on Tuesday, having lost more than half of its value last year due to declining global demand and rising inventories.
Atlas signed a deal last August to supply 60,000 tonnes of copper concentrate to MRI by June 2009.
The first 30,000 tonnes of the 28.2% grade from Atlas’ Toledo mine in the central Philippines contain the equivalent of about 8,250 tonnes of the metal and would be sold at an average of US$7,612.50 a tonne, the company said.
It did not say if it had hedged the rest of the metal amount to be supplied.
Atlas subsidiary Carmen Copper Corp, which operates the Toledo mine in the province of Cebu south of the capital, expects to ship another 5,600 tonnes of copper concentrate before the end of January.
Operations at the Toledo mine, estimated to have deposits of 874 million tonnes of copper ore, with an average grade of 0.41%, resumed in July after a 14-year break due to a lack of funding to repair damage caused by typhoons.
Atlas Consolidated Mining and Development Corp asked shareholders late in October to inject US$48 million into the copper mine while it seeks additional debt financing. The figure should cover mine operating costs until February or March, Buckingham said.