-- Xstrata Copper assesses investor interest in its Frieda River
project
-- Commits to delivering a feasibility study to its partner this
year
-- Continues to evaluate its portfolio of development
projects
MELBOURNE--Xstrata PLC (XTA.LN) is considering selling its
majority interest in the Frieda River copper development in Papua
New Guinea as part of a review of projects worldwide, a spokeswoman
for the mining company's copper division said Thursday.
Xstrata has committed to the work scheduled at Frieda River this
year and to delivering a feasibility study by December to its joint
venture partner, Highlands Pacific Ltd. (HIG.AU), the spokeswoman
said in an emailed reply to questions.
"We are continually evaluating our industry-leading portfolio of
development projects and assessing the best way to advance these
projects, maximize their value to Xstrata and ensure the best
outcome for all stakeholders," she said. "As part of this process,
we are assessing the interest of other investors in the Frieda
River project."
Xstrata is the manager and almost 82% owner of the project, with
Highlands holding the remainder. A prefeasibility study in 2010
indicated the project could support a mine producing 246,000 metric
tons of copper and 379,000 ounces of gold a year for the first
eight years of a multi-decade life.
Highlands in a statement said it had recently been advised that
Xstrata Copper had begun a market evaluation of a number of
projects in its portfolio, including Frieda River.
The Australian exploration company has estimated the project has
a resource of about 12 million tons of copper and 18.5 million
ounces of gold, which ranks as one of the world's largest
undeveloped deposits of the two metals. It has said that Xstrata
has spent more than US$250 million in the last five years on
drilling and engineering studies.
Xstrata Copper is in the midst of expanding its operations, with
projects under construction to boost production by more than 60% to
1.5 million tons a year over the next three years, the spokeswoman
said. Its Antapaccay project in Peru is on track to start
production in the second half of this year, and development of its
US$4.2 billion Las Bambas project in southern Peru is underway.
The company at the end of last year moved to underground mining
at its Ernest Henry copper mine in Australia's Queensland
state.
Write to Robb M. Stewart at robb.stewart@wsj.com