FUTURE OF 3 MINES RESTS ON SILVER PRICE, ASARCO CHIEF SAYS

FUTURE OF 3 MINES RESTS ON SILVER PRICE, ASARCO CHIEF SAYS

A silver price of $6 to $8 an ounce would be required for Asarco Inc. to resume operations at its three silver mines, said Richard de J. Osborne, chairman and chief executive officer.

Mr. Osborne told a meeting of security analysts that the mines are high- cost properties that cannot be operated successfully at current silver prices.Mr. Osborne told reporters following the meeting that Asarco spends $4 million a year to maintain the shuttered mines. He said there are no plans to sell the U.S. mines.

Comex December silver has been trading in a range of $4.36-$4.45 an ounce.

Asarco's third-quarter average silver sales price was $4.50 an ounce, up 65 cents from the year-ago quarter.

Robert Bothwell, Asarco's vice president for sales, said 1993 global silver consumption is forecast at 625 million ounces, while total supply is expected to be 482 million ounces, leaving a statistical deficit of 143 million ounces.

This would be the fourth consecutive annual deficit, he noted.

Asarco is projecting a supply deficit of 544 million ounces by 1996.

From 1990 through 1993, the deficit was 359 million ounces.

"We expect that if the price of silver does not respond to the increasing consumption and supply deficit, the excess buildup in stocks would be consumed by 1996," Mr. Bothwell said.

Mr. Bothwell projected U.S. copper consumption to increase 3.5 percent in 1994, while world consumption would rise 1.4 percent to 9.96 million short tons, he said.

"Western world consumption will exceed production," Mr. Bothwell told security analysts.

Next year, Asarco expects world refined production to rise 0.8 percent to 9.9 million tons, reflecting increased output in the United States and Chile. Mine production should increase to 8.45 million tons.

Mr. Bothwell said improved consumption in Europe in 1994 is likely to occur in Germany and Italy. A Japanese recovery is unlikely before the second half of next year.

He said current U.S. demand is very strong, with nearby metal very tight. U.S. consumption should increase 4.3 percent this year, he added.

Indeed, Mr. Osborne, Asarco's chairman, told reporters that since August

Asarco has bought 20,000 tons of refined copper to satisfy customer commitments. He called the pickup in German employment a key to European recovery.

Mr. Bothwell said imports next year from Eastern Europe should equal 1993's 460,000 tons.

Of that total, 250,000 tons is destined for China this year, he said.