SYDNEY, Jan 15 (Reuters) - MMG Ltd said on Thursday the sell-off in copper markets had done nothing to discourage completion of one of the world’s biggest copper mines, costing $7 billion.
The massive Las Bambas mine in Peru acquired by MMG and minority partners in August is capable of yielding more than 2 million tonnes of copper in its first five years and will begin production in early 2016, according to Andrew Michelmore, chief executive of MMG, an arm of China’s state-owned Minmetals.
Michelmore is counting on copper prices rebounding from current half-decade lows by then as consumers in China and elsewhere chip away at surplus inventories, creating strong demand for copper and lifting prices.
He said the mine was 80 percent finished, with the relocation of whole communities to a newly-built town to make way for the operation underway.
“My own view is that copper (supply) will be tightening and sentiment changing in the second half of 2015,” Michelmore told a media conference.
“If anything, Las Bambas will be coming into the market just when the market needs those tonnes.”
Analysts blame copper’s descent to its lowest price since January 2009 on a mounting supply glut amid a sharp drop off in demand for the metal, found in everything from water taps to high-tech gadgetry.
Michelmore’s comments echoed those of Anglo-Australian miners Rio Tinto and BHP Billiton
Both companies are amassing vast copper holdings in a push to capture a greater chunk of the $140 billion world market.
Separately and in joint ventures, Rio and BHP intend to mine millions of additional tonnes in coming years, despite seeing a market in oversupply.
Michelmore said falling oil prices was a boon for mining companies such as MMG that buy vast quantities of diesel.
“Declining oil prices? You take it and smile,” he said. (Reporting by James Regan; Editing by Joseph Radford)