:: KGHM Wins Part of Rio Tinto Kennecott Tender

Polish miner KGHM has won the first part of a tender to supply Rio Tinto's copper smelter in Utah after a rockslide at Rio's own mine nearby left it struggling to source raw material, three market sources said. Rio Tinto declined to comment, and KGHM could not immediately be reached to comment. Rio has been forced to look for third-party concentrate for Kennecott, its largest copper smelter, after a landslide last month shuttered its Bingham Canyon mine nearby.

KGHM will supply 30,000 dry metric tonnes of concentrate from its Robinson mine in Nevada, the sources said, as part of Rio's tender to buy 150,000 tonnes of third-party concentrate each month from June until October. "The Kennecott smelter took some KGHM supply from Robinson, although it would only have been part of any tender award," said one industry source based in Singapore. The mine produced around 45,000 tonnes of copper in 2011.

The global miner may be forced to look further afield in coming months for supply that will more closely match its own higher grade ore from Bingham Canyon, according to a Swiss trader. High freight costs are likely to rule out supply from top copper producer Chile as well as Peru, he added. "They'll be trying to source material from North America, even Mexico at a push, so that suggests they'll be talking with Freeport or Grupo Mexico," he said.

The sources declined to be identified, because they were not authorised to speak to the media.