July 20, 2010 / 2:40 PM / 7 years ago

UPDATE 1-First Quantum copper output falls in second quarter

* Q2 copper output down 8.3 pct to 85,400 tonnes

* Cuts 2010 copper production forecast by 6.5 pct

TORONTO, July 20 (Reuters) - First Quantum Minerals (FM.TO) said on Tuesday its second-quarter copper production fell as growing legal woes in the Democratic Republic of Congo have forced it to limit investment at its Frontier mine in the central African country.

Already battling to regain rights that were stripped by the Congo government last year from its Kolwezi tailings project, the company learned in May that the Congolese Supreme Court had annulled its rights at the Frontier and Lonshi copper mines, following a challenge by the country’s state-owned miner.

First Quantum is still mining at Frontier as no direct action has yet been taken by authorities to shut down the mine. However, due to the uncertainty, the company cut back on capital investments at the mine during the second quarter.

The company said its copper production in the quarter fell 7.7 percent to 85,400 tonnes, while gold output rose 27 percent to 51,400 ounces on increased production at its mines in Zambia and Mauritania.

The company lowered its 2010 copper production forecast by 6.5 percent to 360,000 tonnes, sending its shares down 1.1 percent to C$60.28 on the Toronto Stock Exchange.

$1=$1.06 Canadian Reporting by Euan Rocha; editing by Peter Galloway

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