UPDATE 1-HudBay may close copper smelter early, CEO says

(Adds details on smelter, changes dateline from Ottawa)

By Cameron French

TORONTO, May 7 (Reuters) - HudBay Minerals (HBM.TO: Quote, Profile, Research) may be forced to shut down its copper smelter in Flin Flon, Manitoba, earlier than previously expected, the company's chief executive said on Wednesday, noting that at current copper treatment prices, the facility does not make money.

"If we were to shut the smelter tomorrow, the financial impact on the company would be positive," Allen Palmiere, who was named CEO of the base metals miner in January, said on a conference call to discuss first-quarter earnings.

Winnipeg, Manitoba-based HudBay said in November it may have to close the smelter by 2015 due to regulations requiring emission cuts that would render the aging plant uneconomical.

However, he said on Wednesday that low industry copper treatment charges and rising fuel costs may mean that could happen sooner than expected, unless the situation changes.

"Do we want to shut the smelter down early? No we don't. But economics may very well dictate that we have to seriously consider it," he said.

HudBay, which mines copper and zinc, does not produce enough copper concentrate to keep the operation running, forcing it to purchase and ship in concentrate from other mines, which pushes costs higher.

The company has decided not to enter into agreements to process third-party concentrate beyond 2008, unless treatment rates improve.