BHP delays big Escondida moly process plant plans

Because of the fall in molybdenum prices, BHP has decided to delay building of a $120 million moly processing plant at its huge Escondida copper mine in Chile.

SANTIAGO (Reuters) - 

Global miner BHP Billiton (BHP.AX) has delayed plans to build a $120 million molybdenum processing plant at the giant Escondida mine in Chile after prices for the metal plummeted on global markets.

"Our molybdenum grade is pretty low and prices have fallen substantially, so we have decided to delay plans for the molybdenum plant at Escondida," a company spokesman told Reuters on Thursday.

Along with many other commodities, molybdenum prices have tumbled to levels near $10 per pound versus more than $30 per pound as recently as October. Forecasters and producers say the slump could last for the next year at least.

Escondida, the world's largest copper mine, was considering investing between $120 million and $150 million to build a molybdenum processing plant that would churn out some 4,000 tonnes per year of the metal.

Molybdenum, which occurs mostly as a byproduct of copper, is used to strengthen steel and make it more resistant to rust and extreme temperatures.

Escondida, seeking to expand copper operations, also is looking at a proposal to build a third concentrator plant that would increase its mineral processing capacity by about 50 percent. The spokesman said it was not yet clear when a decision will be made on that proposal.

Escondida said last month it produced 997,000 tonnes of copper in concentrates and cathodes in the first nine months of the year, 10.4 percent less than in the year-ago period. (Reporting by Pav Jordan; Editing by David Gregorio)

© Thomson Reuters 2008 All rights reserved

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