Copper prices more than doubling since the start of the year and falling copper ore feed for Xstrata Plc's (XTA.LN) Queensland smelter are shining a spotlight on a number of junior copper developers in Australia's Mount Isa region.

Foremost among those with an eye to shopping future ore output or even the whole company to the world's fourth largest copper producer is Exco Resources Ltd. (EXS.AU).

It has a project at the feasibility stage capable of producing 25,000 metric tons of contained copper and is located within sight of Xstrata's declining Ernest Henry mine.

Xstrata late last year boosted capacity at its Mount Isa smelter to 300,000 tons annually, which currently takes feed from Ernest Henry and as well as another two wholly-owned mines in the region.

"Treatment of our ore at Xstrata's operation represents the highest value proposition for us. Discussions with them have been on and off again," Exco Managing Director Michael Anderson told a Sydney Mining Club luncheon.

Other companies in the region include Cudeco Ltd. (CDU.AU) with its Rocklands project that is expected to announce a resource statement by the end of this year, as well as Ivanhoe Australia Ltd. (IVA.AU).

Ivanhoe holds a 20.2% stake in Exco, and is focused on the recently announced Merlin molybdenum-rhenium project as well as exploration in the Cloncurry project area where it holds tenements in a joint venture with Exco.

Meantime, Cape Lambert Iron Ore Ltd. (CFE.AU) has plans for an initial public offering for the 19,000-ton Lady Annie copper mine it acquired from the administrators of failed CopperCo earlier this year.

Xstrata itself has stated the Ernest Henry operation will run out of ore in the next few years.

During the first half of 2009, copper in concentrate output was only 20,651 tons, about 40% of typical capacity of 110,000 tons annually, according to its annual report. Xstrata's other two copper mines in the region have a capacity of 170,000 tons.

Xstrata is busy conducting a study into an underground mine - future potential production isn't yet known.

Since the start of the year, London Metal Exchange copper prices have more than doubled on the year, and are currently trading at US$6,160/ton, reviving share prices of copper-focused miners in lock step.

Over the same timeframe, shares in Cudeco as well as Exco have more than tripled, while Ivanhoe Australia shares have multiplied more than ten times.

-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com
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