Reuters reported that Pan Pacific Copper, Japan's biggest copper smelter bought 40% of a large South American copper mine from the Japanese government as the company aims to increase the volume of ore it refines that comes from its own mines.
Japanese copper smelters are stepping up acquisitions of upstream copper assets to hedge against any increase in ore prices. Their profit margin on smelting has dwindled to less than 5% of copper prices quoted on the London Metal Exchange.

Pan Pacific, a unit of JX Holdings Inc and the government corporation Japan Oil, Gas and Metals National Corporation said that Pan Pacific had bought for an undisclosed sum JOGMEC's 40% stake in the mine located in a region called Frontera that extends over Argentina and Chile.

Canadian miner Ngex Resources Inc continues to hold the remaining 60 percent stake. The Nikkei business paper reported on Sunday the smelter bought the stake for several billions of yen.

A Pan Pacific spokesman, who asked not to be identified due to the company's policy, said that the mine's potential output volume and production schedule had yet to be decided. We need to conduct an extensive feasibility study, but there is a possibility that the deposit is as big as our Caserones mine in Chile.

Pan Pacific's 75% owned Caserones mine in Chile will start producing 140,000 tonnes of copper in terms of copper content in 2014. Pan Pacific, which produces 540,000 tonnes of copper a year, expects its ore self sufficiency rate to rise to 50% of its total output in 2014 thanks to the Caserones output helping it to reduce the reliance on large miners such as Freeport McMoRan Copper & Gold Inc and BHP Billiton.

Source - Reuters

(www.steelguru.com)