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Wrong part delays output for OZ Minerals

OZ Minerals says a wrong part has delayed first production at its Carrapateena copper mine in SA

First production from one of the largest mining projects under development in Australia has been delayed for a month after a vendor supplied the wrong part.

The vendor supplied the wrong specialty hydraulic part for a mineral processing plant at OZ Mineral's massive Carrapateena copper deposit in South Australia's Far North region, pushing back the first saleable concentrate production until December.

"Correct parts have now been sourced and remediation works are underway," the company said in an ASX release on Tuesday.

OZ Minerals chief executive Andrew Cole said the postponement was disappointing considering the the rest of the project was either complete or nearing completion, but it would have no influence on the project ramp up in 2020.

"Over 200,000 tonnes of ore is now stockpiled in preparation for commissioning of the minerals processing plant and underground development and installation of underground infrastructure is progressing well," he said.

As a result of the delay, the company said it was no longer forecasting the mine would produce 2,000 to 4,000 tonnes of copper and 3,000 to 6,000 ounces of gold this year.

OZ Minerals said it would forecast 2020 production in late January.

The company said there was no significant cash impact from the delay, but there would be an accounting impact, with the capital cost of Carrapateena now expected to be in the range of $950 million to $980 million.

The mine 160 km north of Port Augusta is set to become the second-largest copper mine in South Australia, behind BHP's Olympic Dam.

Separately on Tuesday, OZ Minerals increased its estimate of Carrapateena's copper resource by 34 per cent, to 5.2 million tonnes, and gold metal resource by 29 per cent, to 7.4 million ounces.

It also increased the mine life of Prominent Hill copper-gold mine in northern South Australia by a year, to 2031.

At 1123 AEDT, OZ Minerals shares were down 0.6 per cent to $10.93.