Mitsubishi Materials to Restart Co-development of Canadian Cu Mine

Mitsubishi Materials announced on Thursday the firm will restart development of Similco copper mine in Canada in cooperation with Copper Mountain Mining Corporation (CMMC), Canadian mining company. Mitsubishi Materials will subscribe for newly-issued shares of Similco Mines, CMMC’s wholly owned company for the project, and acquire a 25% equity interest in Similco Mines for C$ 28.75 million (approximately 2.9 billion yen). Mitsubishi Materials will also arrange C$250-million project loan for the project. Similco’s copper concentrate output will be approximately 150,000 tonnes per annum, all of which will be purchased by Mitsubishi Materials.Similco copper mine is located 15 kilometers south from Princeton, British Columbia or 300 kilometers east from Vancouver. The mine is open-pit with 176-million-tonne minable reserve at 0.33% copper grade.Copper concentrate at 150,000 tonnes per annum equals to copper ingot at approximately 45,000 tonnes per annum. Similco can supply 15% of materials to be consumed at Mitsubishi Materials’ Naoshima smelter in Kagawa, Japan and Onahama smelter in Fukushima, Japan.To estimate Similco’s operating period at 14 years, its total output is expected to reach 510,000 tonnes for copper, 10 tonnes for gold and 111 tonnes for silver. An initial expense is C$ 457 million (approximately 46.2 billion yen). The production will start at the beginning of 2011.Similco copper mine started operation in 1923 and halted production in 1996 due to low copper price. The project will benefit from the already existing infrastructures, which will reduce capital expenditure and the construction period.Mitsubishi Materials has invested in 4 offshore copper mines: 1% in Escondida, Chile, 10% in Los Pelambres, Chile, 2.5% in Batu Hijau, Indonesia and 31.25% in Huckleberry, Canada. Mitsubishi Materials purchases copper ore from these 4 mines which equals to total 200,000 tonnes or less of copper metal. The proprietary mine ratio will reach aimed 75% after Similco’s operation start in 2011 from current 60%.