Metal Minings News

Swedish miner and smelter Boliden AB saw its shares tumble today after it reported a 73 % drop in its fourth-quarter operating profit due to lower metals prices, falling refining charges and a weaker dollar.

Boliden shares were down 15.9 % at 0935 GMT after the firm said it made a fourth-quarter operating profit of 590 mln Swedish crowns ($90.9 mln), down from 2.23 bln a year ago. The company, the world’s fifth-biggest zinc producer and 12th biggest copper smelter, said currency effects had hit results by 362 mln crowns, metals prices and terms by 849 mln, with lower volumes in mining and smelting accounting for a further 359 mln of the decline from the previous year.

“Boliden is greatly exposed to U.S. dollar exchange rates, the price of zinc metal and TC/RCs (treatment and refining charges) for copper and zinc,” the company said in a statement. A fall in the price of zinc affects mines and smelters negatively both in ongoing business and revaluation of stocks.

During the fourth quarter the price of zinc fell by 37 % compared with the same period a year ago. The price of zinc was down 18 % on the third quarter. The firm does not hedge its zinc production. The majority of its exposure to copper and other metals are hedged. Treatment and refining charges for copper decreased significantly in the fourth quarter due to a shortage of copper concentrate. Sales in the fourth quarter fell to 7.29 bln crowns from 9.73 bln in the same period in 2006.

Boliden’s mines produced 81,480 mt of zinc in Q4, virtually unchanged from the previous year. Copper production was down 9 % at 17,827 mt. Its smelters produced 112,604 mt of zinc in the fourth quarter, unchanged from the previous year. Copper production was down 12 % at 79,828 mt, with gold, silver and lead production all lower than the fourth quarter in 2006. Full-year operating profit was 5.43 bln crowns, down from 8.52 bln in 2006.

The plan to expand ore production at its Aitik copper mine to 36 mln mt annually is on track. Ore production will reach 33 mln mt per year in 2010 and full capacity in 2014.

This entry was posted on Thursday, January 24th, 2008 at 7:46 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.