Xstrata hikes cost estimate for copper mine

Swiss mining giant Xstrata said on Monday it would cost $300 million more than previously expected to develop the Frieda River copper and gold mine in Papua New Guinea.

The Swiss company had, according to a statement, handed over a feasibility study to its local partner on the project, Highlands Pacific showing that it now expects the total investments to tick in at $5.6 billion, compared with a previous estimate two years ago of $5.3 billion.

Xstrata, which owns nearly 82 percent of the project, also said it had delivered "Study Programme Report" examining the possibility of providing electricity to the mine through a gas-fired transmission line rather than the previously proposed hydro-electric dam.

"It also identified the potential for additional capital savings in relation to waste management," Paul Gow, Xstrata's manager of the project, said in the statement, pointing out that the potential savings could reduce investments to $5.0 billion.

In a separate statement, Highlands Pacific said the estimated investment increase was in part due to the depreciation of the US dollar in recent years — something that has significantly raised costs for a number of other new mining projects around the world as well.

Last June, Xstrata hinted it might consider selling its participation in the project, as it re-evaluated its global activities.

The Frieda River mine is expected to produce 204,000 tonnes of copper and 305,000 ounces of gold over a 20-year mine life, according to Xstrata, which began managing the project in 2007.

Highlands Pacific said that it and Xstrata were set to hold discussions with the Papua New Guinea government next year to discuss equity ownership, permits and when project development can begin.

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Glencore Xstrata fires 1,000 African workers

Swiss-based Glencore Xstrata has dismissed 1,000 workers who staged wildcat strikes at its South African chrome operations last week, the firm said on Monday, amid continuing tensions between rival unions in the key mining sector.

"These thousand people have been dismissed Friday and over the weekend," spokesman Christopher Tsatsawane told AFP.

"They have until tomorrowTuesday, to appeal their dismissal." 

Workers downed tools last Tuesday on the Helena, Magareng and Thorncliffe sites in the northern province of Limpopo.
A member of the upstart Association of Mineworkers and Construction Union 
(AMCU) accused a shift supervisor of assault, which provoked the strike.
AMCU and the powerful National Union of Mineworkers (NUM) are locked in a 
struggle for members and power over South Africa's mines.
NUM, which is allied with the ruling African National Congress, has been 
bleeding members who accuse it of being too close to mine companies.
The rivalry has often descended into violent clashes and strikes as AMCU 
members demand union recognition from mining companies.
Last November, Xstrata, based in the canton of Zug, fired 400 illegal strikers who stopped work over an internal disciplinary system.

Thousands of mines workers have been fired and then re-hired during the rash of strikes across South Africa's mining sector in the past year.
Strikes often turned deadly, with 34 people shot dead by police on one day 
at the Lonmin platinum mine in the North West province last August.
Last week, President Jacob Zuma called on strikers and firms to find swift 
solutions to disagreements amid renewed wildcat stoppages.
Mining and related sectors account for around 20 percent of Africa's 
largest economy.