OZ Minerals Falls to Lowest in 12 Years on Outlook: Sydney MoverDavid Stringer
OZ Minerals Ltd., the second-worst performer this year among Australia’s 100 largest publicly traded companies, fell to its lowest in more than 12 years in Sydney trading as it offered weaker-than-expected guidance for copper output in 2014.
The Melbourne-based copper producer declined 14 percent to A$2.65 at the close in local trading, the lowest since May 22, 2002. It earlier dropped as much as 33 percent, the most since March 12, 1990. The benchmark S&P/ASX 200 Index fell 0.8 percent.
Copper production in 2014 will be 75,000 metric tons to 80,000 tons, the company said today in a statement. More work is needed to raise production at its Prominent Hill mine in South Australia by reducing congestion and removing equipment from the open pit, it said.
“It’s weak in terms of the expected copper output,” said Evan Lucas, a Melbourne-based strategist at IG Markets Ltd. “This is well below where market expectations had been, particularly as the company expected its numbers to pick up after what has been a very disappointing year in 2013.” JPMorgan Chase & Co. estimated OZ Minerals would produce 90,700 tons of copper in 2014 in an Oct. 14 note to clients.
OZ Minerals, which wrote down the value of Prominent Hill by A$231.9 million ($212 million) in the first half, expects to meet a production forecast of 70,000 tons to 75,000 tons of copper in 2013, it said in the statement. The producer had twice cut its 2013 production forecast on lower-than-expected ore recovery in part of the mine.
With 20 million tons less waste material to remove from the mine in 2014 compared with this year, the producer believes it will meet its forecast, Chief Executive Officer Terry Burgess said.
“There’s no great leap of faith needed to do what we are planning to do in 2014,” Burgess said today on a media conference call. “It’s not as high as the market expected, but it’s more than 2013 and there’s more confidence around those numbers.”
Construction of the Malu underground mine at Prominent Hill, expected to add 10,000 tons of production in 2015, will require total capital expenditure of A$201 million, the company said in its statement. Prominent Hill may continue operations for about another 10 years, Burgess said on the media call.