Constellation to open copper mine in Utah

Constellation Copper Corp. plans to begin production in November at a mine in Utah that it started 12 years ago amid expectations of high copper prices "for years to come," Chief Executive Gregory A. Hahn said.

The $55 million open-pit mine in San Juan County is expected to produce 54 million pounds of refined copper a year, Hahn said in a telephone interview from Denver. Constellation started work on the mine in 1993, only to halt construction as copper prices fell to a 14-year low in 2001. Prices have since more than doubled as global demand exceeded output.

"I never expected this to take 12 years," Hahn said. Two gold and silver mines in California he started while at CoCa Mines Inc. from 1986 to 1991 took two years. "There is a perception in the market that there's all this excess capacity at mines, and all they have to do is crank up production and out comes copper," he said. "It's not that simple."

Constellation, based in Denver, plans to have a work force of 145 at the mine and has received more than 1,500 applications for the jobs, Hahn said. Workers will not be part of a union, he said.

"You're not the first one to ask me" whether Constellation is interested in buying Asarco LLC mines in Arizona, Hahn said.

Asarco told workers last week it may sell "various" assets and reorganize the business as a strike now in its fifth week has reduced its copper production. Asarco is a wholly owned subsidiary of Grupo Mexico SA in Mexico City.

Hahn worked at Noranda Inc. for 10 years until 1986. He helped to start Constellation in 1993.

All production from Constellation's Utah mine has been sold to Sempra Metals & Concentrates Corp. at prices tied to futures on the Comex division of the New York Mercantile Exchange plus a premium for refined metal, Hahn said.

The estimated total cost of production is 75 cents a pound. The London office of South Africa's Investec Ltd. provided a $30 million loan for the mine, Hahn said.

The Utah copper mine is the first to start production in the U.S. since Asarco's Silver Bell mine in Arizona opened in 1995, Hahn said.

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