Miner OZ Minerals says its guidance for gold production could change as its priority is for more profitable copper because of near-record prices for the commodity.

OZ Minerals has maintained its production guidance for gold of between 185,000 and 205,000 ounces for this calendar year.

It is also on track to meet its production guidance of between 100,000 to 110,000 tonnes of copper for calendar 2011.

“The direction that we are taking is we still aim to make our (gold) guidance,” Mr Burgess told analysts on Tuesday.

“It’s not going to be our main priority if we find it is going to influence our copper production.

“The priority will be to treat copper ore.”

Revenue generated from the treatment of copper ore is about four times that generated from the treatment of gold ore at current commodity prices, Mr Burgess said.

Copper prices are near record highs, driven by China and India’s economic growth and investment in electricity networks, which require large amounts of the industrial metal.

OZ Minerals lifted production of copper and gold in the three months to June 30, from the March quarter, and reported a reduction in costs.

The lower costs meant OZ Minerals margins were now “very significant”, City Index analyst Peter Esho said.

OZ Minerals’ main operation is the Prominent Hill mine in South Australia.

It also conducts exploration in the Prominent Hill area for additional copper-gold resources, and explores in Cambodia.

The company is holding about $750 million in cash for takeovers.

Mr Burgess said the company was still busy looking for prospects that could add value for shareholders.

The miner also announced it is to buy back up to $200 million of its shares on market, as it had previously mooted.

The buyback will commence on August 17 after Oz Minerals releases its half year financial results.

The company said it expected indirect cost increases of between $7 million and $10 million annually because of higher fuel and freight costs when the carbon tax comes into effect next year.

OZ Minerals reported a net profit of $586.9 million for calendar 2010.

Its shares gained 36 cents, or 2.8 per cent, to $13.32 on Tuesday.