Australia`s MMG CEO sees short term upside momentum for copper

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Prices of copper have nearly doubled from last year`s lows and the red metal was one of 2020`s stand out performers.

"We have strong confidence in fundamentals of our core commodities, particularly copper," chief executive Gao Xiaoyu told a results call. "Momentum will continue particularly in the short term."

MMG flagged a possible drop in copper production this year due to Covid-19 related production delays, and its suspension of output at its Kinsevere mine in September.

It plans to produce 360 000 to 390 000 t of copper in 2021, having churned out 384 564 t of the red metal in 2020.

Output at MMG`s Las Bambas, one of the world`s top copper mines, may recover to 310 000 to 330 000 t this year, after falling 19% year to 311 020 t last year, it said.

Road blockades in Peru continued to restrict concentrate shipments, but production has been minimally impacted, MMG said in a filing to the Hong Kong exchange on Thursday.

"Las Bambas copper volumes are expected to recover from 2022 onwards, with average annual production of approximately 400 000 t anticipated over the period 2022 to 2025," it added.

MMG, majority-owned by China Minmetals Corp, planned to make 240 000 to to 260 000 t of zinc this year, after combined output from its Australian operations reached 245 097 in 2020, down 3% year-on-year.

It is considering a mine extension at its Kinsevere copper operations in the Democratic Republic of Congo, which would add a circuit for battery material cobalt, setting the firm up as a battery metals provider.

MMG needs to reduce its debt-to-equity ratio to 30% to 40%, from more than 70% currently, before considering paying dividends, Ross Carroll, MMG`s CFO said.