Because of a panned stripping campaign at its Batu Hijau Mine in Indonesia that will reduce production during the operation, Newmont Mining Corp. said it expects copper production over the next year to fall short of estimated 2011 levels.
For 2012, the company announced that it anticipates copper production of roughly 150 million to 170 million lbs with costs of about $1.80 to $2.20/lb. Newmont estimated it recorded copper production of 206 million lbs at a cost of $1.26 per pound in 2011.
The stripping effort at the Batu Hijau mine removes waste layers in order to access the next layer of ore.
A Newmont spokesperson added that production last year at Batu Hijau was higher than expected thanks to a delayed rainy season that allowed extended access to ore in the bottom of the mine’s pit. Newmont estimates Batu Hijau produced 137 lbs of copper in 2011, mostly above the company’s forecast for 120 million to 140 million lbs., the Wall Street Journal reported.
In gold news, the world's second-biggest gold producer after Barrick Gold Corp., said it expects gold production for the year to come in mostly in line with estimated 2011 production levels. For 2012, the company predicted gold production of 5 million to 5.2 million oz, compared with estimated production of 5.2 million oz in 2011.
Costs applicable to sales of the precious metal were forecast at $625 to $675/oz, up from the estimated $592/oz cost recorded last year.
Newmont also said it expects to spend roughly $3 billion to $3.3 billion on capital expenditures this year. About 60 percent of that estimate is allocated to growth project initiatives, including further development of the Akyem project in Ghana.
While benefiting from high-flying prices for copper and gold, the company has in recent quarters seen lower production work against gains from surging prices. Third-quarter earnings slipped 8.2 percent as a decline in production and a steep acquisition charge weighed down profits for the period.