Brazil's Vale says first Salobo copper due in 2010

By Marcelo Teixeira

SANTIAGO, April 8 (Reuters) - Brazilian miner Vale said on Tuesday it continues to seek alternatives to increase its copper production and confirmed it expects to start production at the large Salobo mine in Brazil in the second half of 2010.

"Copper continues to be a priority for Vale. It fits well in our growth strategy," Director for Development of Mineral Projects Eduardo Jorge Ledsham told Reuters on the sidelines of the Cesco-CRU Copper Conference.

He said the company also expects to produce its first lots of copper cathodes in Chile in 2009. Vale (VALE5.SA: Quote, Profile, Research)(RIO.N: Quote, Profile, Research) is implementing an operation in Salamanca, in northern Chile.

"It is a project oriented mainly to generate capital for new exploration activities in Chile," Ledsham said. Named Papomono, the operation will produce 22,000 tonnes of copper cathodes per year.

The Brazilian company, which receives up to 40 percent of its revenue from sales of iron ore and pellets, is actively seeking diversification.

It ended merger negotiations with Xstrata (XTA.L: Quote, Profile, Research) without reaching a deal last month and analysts said the company could seek smaller targets in the months to come.

Ledsham did not want to comment on possible acquisition targets. He said the company was concentrating its efforts on organic growth, developing existing plans and analyzing possibilities in places such as the Philippines.

The Salobo mine in the Carajas area in northern Brazil is the company's main copper project with total resources of 986 million tonnes of ore with 0.8 percent copper content.