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OzMin wraps diligence on copper assets, says Terry Burgess

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By David Fickling

OZ Minerals has made non-binding offers to acquire copper assets, chief executive Terry Burgess said today.

The miner has carried out due diligence on acquiring three and up to four copper assets, Mr Burgess said.

Oz Minerals sold off the bulk of its assets to state-owned China Minmetals in 2009 to escape a debt overhang, leaving it with a $1 billion cash pile at December 31, 2009, which analysts expect to see deployed on new investments.

In a speech to the Sydney Mining Club today, Mr Burgess said Oz Minerals was “content with our equity interest” in Sandfire Resources.

OzMin spent $100 million on a 19.9 per cent stake in the Western Australia-based copper-gold miner at the start of July, although a more recent placing by Korean copper smelter LS-Nikko reduces the holding to 17.3 per cent.

Mr Burgess said that he had seen evidence of slowing copper demand in China during recent visits, as a result of government efforts to cool an overheating economy.

But any slowing would be short-lived, he said – “say, a matter of six months” – and wouldn’t change his longer-term bullish outlook for the metal, supported by expectations of supply growing by 1 per cent this year, compared to a 6.5 per cent increase in demand.

The company’s principal asset is the Prominent Hill mine in South Australia, which has been “routinely operating 15 per cent above design capacity” over the first half of the year, he said.