Melbourne: Aditya Birla Minerals , part of Aditya Birla Group, is shutting the smaller of its two Australian copper mines as it is struggling to make money at current copper prices.
Aditya Birla Minerals said on Wednesday it would put its Mt Gordon operation in Queensland state on care and maintenance by the end of April, and would await the outcome of a study on whether to expand and lower the operating costs of the mine.
Mt Gordon, producing at an annual rate of 20,000 tonnes of copper in concentrate, supplies a copper smelter in India owned by another Aditya Birla subsidiary, Hindalco Industries .
"At current production rates, the unit operating cost per pound copper produced at the Mt Gordon operations has become unacceptably high, which is adversely impacting the profitability of the operations and the company," Aditya Birla Minerals said in a statement to the Australian stock exchange.
It said performance at Mt Gordon, which it reopened two years ago when LME copper prices were around $9,600 a tonne, had been weaker than expected for a range of reasons, but did not elaborate.
Copper is now trading around $7,700 a tonne, or around $3.49 a pound, well below Mt Gordon's cash costs in the December quarter at A$3.82 a pound, and the company warned that prices may not improve in the near-term.
"Furthermore, there are uncertainties in regards to economic conditions in Europe and a slowdown of the Chinese housing market," it said.
Aditya Birla Minerals appointed Australia and New Zealand Banking Group last month to advise it on options for the Mt Gordon mine, which it said would include "corporate and operational strategies".
The study is expected to take several months.
Aditya Birla Minerals shares fell 3 percent to A$0.48 in early trade, underperforming the broader market.