TORONTO (miningweekly.com) – JSE-listed Palabora Mining earned R284-million in 2009, a decrease of 60% compared with net profit a year earlier, mainly because of lower copper prices.

Headline earnings for the year declined R5,98 a share, compared with R14,93 a share in the previous year, Palabora reported on Monday.

Sales fell 6% year-on-year to R5,83-billion.

MD Matthew Gili said that he was pleased to be able to report a net profit, after the difficult market conditions with which the company contended in 2009.

“Gross revenue was lower in 2009 compared with 2008 because of a 37% decrease in copper prices which was partially offset by a 35% increase in magnetite sales over 2008 and a 42% increase in magnetite pricing,” he commented.

Palabora realised an average copper price of $2,31/lb in 2009, compared with an average of $3,17/lb a year earlier.

Repairs and maintenance in several mine production centres, along with an increase in purchased cathode resulted in a higher cost of sales.

Gili said he was “cautiously optimistic” that markets would continue to strengthen in 2010, with buoyant demand for copper and magnetite.

During 2009, Palabora settled its senior term facility, after making a final repayment of R80-million, and currently has outstanding debt of R102-million on its revolving credit facility.                                                     

Diversified miner Rio Tinto is Palabora's largest shareholder, with 56%.