AdityaBirla Minerals, the Australian subsidiary of AdityaBirla's Hindalco Industries is shutting one of its Australian copper mines as the prevailing low global copper prices have made operations unviable.
In a filing with the Australian Securities Exchange, Perth-based AdityaBirla Minerals said that it will put its Mt Gordon Operations under care and maintenance by the end of April 2013.
When a decision was taken to re-start the Mt Gordon operations in January 2011, copper prices were around $9,600 /MT. Since then, they have fallen to around $7,700 / MT, with the metal trading at around $3.49 a pound - below Mt Gordon's cost of $3.91 a pound.
Apart from the low price, Aditya birla Minerals says there are uncertainties over economic conditions in Europe, along with a slow down of the Chinese housing market.
''At current production rates, the unit operating cost per pound of copper produced at the Mt Gordon operations has become unacceptably high, which is adversely impacting the profitability of the operations and the company," it said in the filing.
The Mt Gordon operation is located in northwest Queensland, approximately 120 km north of Mt Isa. The mine was producing 20 kt of annually and has the ability to mine 1.2 mtpa of ore.
It said, "As per the scoping study results announced to the ASX on 20th February 2013, there is an opportunity to transform Mt Gordon into a high-production operation with lower per unit operating cost by converting the present open stope trucking haulage method into a sub level caving hoist shaft haulage method.
It said that is currently conducting a strategic review of the Mt Gordon operations and the company has decided not to deplete the existing high-grade resources at the currently high unit cost.