Inmet pulls plug on Copper Range plant

Excessively high capital costs have forced Inmet Mining (TSE) to shut down and re-evaluate the Copper Range operation in Michigan.

Mining and milling at Inmet’s 80%-owned facility will cease in late September.

It is the latest in a series of gloomy notices regarding Copper Range. Earlier this year, smelting was suspended.

Originally, it was expected that mining would be suspended in the second half of 1997. The date was moved ahead partly because capital costs were higher, and copper grades lower, than expected.

In 1994, operators mined almost 5 million tonnes of ore averaging 1.13% copper, from which were extracted 43.2

million lb. of the red metal. In addition to mine production, Metall Mining, Inmet’s predecessor, bought concentrates and produced another 16.8 million lb. copper. The average cash cost of production in 1994 was US94 cents per lb.

In 1993, Copper Range cranked out 68.1 million tonnes at a cash operating cost of US79 cents per lb.

On a positive note, Inmet is proceeding with a feasibility study on solution mining at Copper Range which, if proven viable, could bring the mine back to life.

The study is examining the possibility of pumping sulphuric acid solution underground and onto piles of broken ore from pillars. The pregnant solution would then be pumped to surface for solvent extraction-electrowinning.

Inmet believes the undulating nature of the orebody and the predominance of chalcocite, a copper sulphide mineral capable of generating additional acid, render the Southwest mine ideally suited for solution mining. The pillars contain about 3 billion lb. copper, 30% of which could be recoverable.

The study, budgeted at $10 million, is expected to take another 2-3 years to complete. If it is successful, solution mining may render conventional mining at Copper Range viable once again.

The closure of Copper Range will result in a charge of $245 million, or $3.02 per share, to Inmet’s second-quarter earnings. This charge also includes provisions for future site reclamation and other closure-related costs.

Suspension of milling at Copper Range will leave other companies in the lurch.

Earlier, Great Lakes Minerals (TSE) and Brookline Minerals (VSE) announced plans to develop the nearby 543-S copper deposit. The companies were planning to complete a 3-phase, $5.5-million development program, following which reserves would be mined and then milled at the Copper Range facility.

Great Lakes and Brookline are now reviewing their options, while work at the 543-S project is on hold.