Nippon Mining Holdings Inc., which controls Japan's biggest copper smelter, said it will focus on digging its own ore as supplies remain "tight" and prices "very high."
The company is conducting feasibility studies to dig ore in Chile at the Caserones site and in Peru at the Quechua mine, President Mitsunori Takahagi said in an interview Friday. Between 110,000 and 150,000 metric tons of ore a year may be mined from Caserones after production starts in 2011, he said.
Nippon Mining Holdings, which co-owns Pan Pacific Copper Co. with Mitsui Mining & Smelting Co., is seeking to reduce its reliance on ore from outside suppliers amid a shortage of concentrates, the raw material for the refined metal. Pan Pacific last month said it would spend $490 million (¥55.1 billion) on the Quechua project, 700 km south of Lima.
"We expect copper prices to continue at a very high level," Takahagi said in the interview in Ibaraki.
"Supply will be very tight versus demand and hence we believe it is important to mine on our own."
Copper for delivery in three months on the London Metal Exchange added $50 a ton, or 0.8 percent, to $6,560 (¥737,000) a ton Friday afternoon in Tokyo. The metal has gained 3.6 percent this year.
Fees paid by miners to Japanese smelters for processing copper this year fell amid shortages of concentrates and growth in smelting capacity. Pan Pacific produces about 600,000 tons of copper a year.