Equinox Targeting Acquisition to Add to African Mine
Equinox Minerals Ltd., owner of Africa’s biggest copper mine, said it’s looking to make an acquisition to add to its Lumwana project in Zambia and forecast continued long-term price gains on supply constraints.
“We have an active program underway, looking for opportunities,” Craig Williams, chief executive officer of the Perth-based company, said in an interview. “We’ll certainly be sticking with copper.”
The $841 million Lumwana mine, Zambia’s largest foreign investment project, began production in 2008 and Equinox this month increased its forecast 2010 output by 3.7 percent to 140,000 metric tons of concentrate. Copper in New York last week had its fifth weekly gain as the dollar’s slump enhanced the allure of raw materials and inventories of the metal slumped.
“I would like to have another advanced asset that could be in production within two years,” Williams said in an interview on Oct. 15. “That could be anywhere on the globe, but we would like to reduce our risk profile so we’d be looking at an equal or lower risk area than Zambia.” Equinox fell 1.5 percent to A$5.91 at the 4.10 p.m. close of trade on the Australian stock exchange in Sydney, giving it a market value of A$4.18 billion ($4.12 billion). The stock also trades on the Toronto stock exchange.
Copper futures in New York fell 0.3 percent to $3.8265 a pound at 9:11 a.m. Melbourne time. They have risen 30 percent this half. Prices of the metal, used in construction and household appliances, will continue to rise in the long term, Williams said.
“The problem for the copper market is new supply,” Williams said. “The supply side response to a strong copper market is slow. A lot of the big deposits that are waiting to be developed are in countries that have political issues. I see in the next five or 10 years a continuing supply-side issue. For that reason, there will be continued price rises.”
To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net
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