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Billionaire Lundin bets on copper rebound with boost at top mine

[SANTIAGO] Lundin Mining Corp, founded by Sweden's billionaire Lundin family, is stepping up drilling at its top copper mine, betting prices will recover from six-year lows.

Copper will return to US$3 a pound this year after sinking to US$2.45 last week as the market takes into account looming mine shortages, Chief Executive Officer Paul Conibear said in a telephone interview on Monday.

Lundin can revert a projected production drop at Candelaria, which Freeport-McMoRan Inc operated for 20 years, to maintain companywide output rates over the next five years, he said.

The Lundin family enhanced its reputation as a countercyclical commodities investor in November when the base metals company bought Candelaria for US$1.85 billion.

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The Bloomberg Commodity Index lost 17 per cent last year, the worst performance since 2008, on signs of oversupply as global demand led by China slows.

"We always like to invest at the bottom of the market and go in when others are leaving," Mr Conibear said. "We are happy to take risk, manage risk, and come out stronger the other end."

The family got into commodities in the 1970s when Adolf Lundin, a petroleum engineer, helped discover Qatar's North natural gas field, the world's largest. It set up the mining company in the 1990s combining mines in Europe. Now son Lukas helps oversee more than 10 companies involved in global mining and oil exploration, including Lundin Petroleum AB.

Lundin Gold Inc, based in Vancouver, paid US$240 million in December to acquire one of the world's biggest underdeveloped gold deposits in Ecuador abandoned by its Canadian rival Kinross Gold Corp. The group holds one of Africa's biggest oil deposits in Kenya through its Africa Oil Corp venture.

Lundin Mining will double copper and zinc output at the Neves Corvo mine in Portugal, Mr Conibear said. Zinc and nickel, which Lundin produces at its Eagle mine in Michigan, could rise 50 per cent in the next 18 months because of mine shortages, he said.