The period ended Oct. 12 was another one of sideways chopping in the broad markets, with the Dow Jones Industrial Index falling 110.50 points to 10,077.18 and the S&P 500 index slipping 12.64 points to 1,121.84.
The most momentous mining decision was made by the second-largest copper producer, Phelps Dodge, which approved an US$850-million expansion at its 82.5%-owned Cerro Verde copper mine, near Arequipa in Peru. Through the expansion, some 1 billion tons of sulphide reserves averaging 0.51% copper will be processed through a new concentrator, and mine output will triple to 300,000 tonnes copper annually. Compania de Minas Buenaventura owns 9.2% of the mine, while the remainder is publicly traded in Lima. Buenaventura has agreed to boost its ownership in Cerro Verde up to a maximum of 20%, while Sumitomo Metal Mining Co. and Sumitomo Corp. have agreed to buy a joint equity position in Cerro Verde of 21-25%. In all, Cerro Verde expects to take in proceeds of US$400-500 million from the above transactions, with Phelps Dodge retaining a majority stake. For the period, Phelps Dodge fell US28 to US$91.74 while Minas Buenaventura fell US96 to US$23.99.
BHP Billiton will return up to US$2 billion to its shareholders, including an off-market stock buyback for Australian shareholders worth between US$700,000 and US$1.1 billion. Following the buyback, BHP will consider ways to return the balance of the US$2 billion to shareholders within 12 months. Options include more stock buybacks and higher dividends. BHP slipped US19 to US$21.44 on the week.
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