August 4, 2016 / 11:27 AM / 2 years ago

UPDATE 1-Japan's JX cuts FY16/17 copper output at Caserones mine by 27 pct

* Caserones April-June output comes to just 17,000 T

* JX sees FY16/17 copper output at Caserones at 100,000 T

* JX’s first-quarter net profit dips 53 pct on commodity slump (Adds quotes and details)

By Yuka Obayashi

TOKYO, Aug 4 (Reuters) - Japan’s JX Holdings Inc lowered its copper output target at its Caserones mine in Chile by 27 percent to 100,000 tonnes for the year through March 2017 due to heavy snow in June and a lack of skilled workers, it said on Thursday.

The mine’s ramp-up has been repeatedly delayed, weighing on profits of the mine’s owners, including JX and Japanese trading house Mitsui & Co. But the delay is expected to have little impact on global prices in a market awash with supply.

JX in May had set the aim to more than double Caserones’ output to 137,000 tonnes in this financial year, but it now expects to miss the target, Executive Officer Katsuyuki Ota told a news conference on the company’s first-quarter earnings.

Caserones produced just 17,000 tonnes in copper concentrate over April-June as snow forced it to halt operations for eight days in June, Ota said.

“The utilisation rate went down in June due to heavy snow, but we expect a rate of around 80 percent in August and September,” he said, adding that the company aims to achieve full utilisation rates by March. The target for the mine’s annual output capacity at full production is 150,000 tonnes.

JX has hired a consultant to help revamp the mine’s operations, and expects cost reduction through job cuts and other measures to offset a shortfall in cash flow from lower output, Ota said.

“We don’t see any need for extra funds for the mine at the moment,” Ota said.

JX’s unit Minera Lumina Copper Chile - which operates the Caserones mine - named Maciej Sciazko as its CEO as of Thursday, replacing Ricardo Lopez, a spokesman for JX’s metal unit said.

Sciazko, who the spokesman said was chosen because of past experience in improving mining operations, was formerly a general manager of the Sierra Gorda copper mine in Chile.

The spokesman gave no specific details on the issues with inexperienced or unskilled workers, saying that the operator’s skills needed to be improved.

“Technical issues have been solved, but we still need to improve soft issues,” the spokesman said.

For the April-June quarter, JX Holdings reported a 53 percent drop in net profit to 25 billion yen ($247 million) as a prolonged slump in oil and copper prices eroded its earnings, and increased operating costs at Caserones added further pressure.

Caserones is 77.37 percent-owned by Japan’s Pan Pacific Copper, a joint venture of JX and Mitsui Mining & Smelting Co Ltd. Mitsui holds the remainder.

$1 = 101.3600 yen Reporting by Yuka Obayashi; Editing by Tom Hogue

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