Tuesday, March 17, 2009

Long Run Fixed Costs

One problem with the mining industry is that after you're all done, you still have some rather large fixed costs to contend with. Asarco is dealing with those through bankruptcy.

Bankrupt copper miner Asarco LLC plans to spend $1.1 billion to settle environmental disputes involving mine sites in Arizona, Colorado, Montana and several other states.

The proposed settlements, subject to the bankruptcy court's approval, are a key to the Tucson-based company's efforts to emerge from Chapter 11.

The proposal is related to Asarco's plan to sell its operating assets for $1.7 billion in cash and debt to India-based Sterlite Industries. Asarco's assets include three open-pit mines and a copper smelter in Arizona.

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