LME WEEK-Copper smelter Aurubis scans for deals with $2 bln warchest

LONDON, Oct 30 (Reuters) - Europe's biggest copper smelter, Aurubis, has 1.2 billion euros ($2.1 billion) in its warchest to grow through acquisitions, its chief executive Jürgen Schachler told Reuters, boosted by low debt and improvements in internal processes.

Aurubis outlined its new strategy, called Vision 2025 in March, saying it planned to expand its output of other non-ferrous metals while also expanding its geographical footprint.

"We do have lots of firepower," Schachler told Reuters in an interview during LME Week, an annual gathering in London of the global metals industry.

The company calculates the warchest as three times EBITDA, which is currently around 400 million euros. An efficiency enhancement program should boost Aurubis' base EBITDA by 200 million euros by 2020, Schachler said, taking the deal-making budget to about 1.8 billion euros.

Aurubis produces copper by smelting copper concentrate (ore) and by recycling scrap metal. It also produces copper products including wire, rod and shapes.

Schachler said the company was looking at Europe and South America for deals, adding that the United States would also be a logical path for expansion due to Aurubis' existing business there and that the recycling market was not saturated.

"In the United States we won't have to fight for market share and it's also a market we are familiar with, which minimises risk," Schachler said, adding the company was looking beyond current geographical locations for growth.

Aurubis currently produces and recycles copper products from its operations in Buffalo, New York.

A more comprehensive strategy will be announced at the company's full-year results in December, which will detail the investments, Schachler said.

Schachler said the scrap market was currently well supplied due to higher prices for copper and that he expected a "slight surplus" in copper concentrates this year.

Aurubis expects treatment and refining charges for concentrates (TC/RCs) in 2018 to stay the same or be slightly higher, Schachler said.

Copper ore TC/RCs are paid by mining companies to smelters to refine concentrate into metal and are a key part of the global copper industry's earnings.

"Our analysis of supply and demand (in) 2018, in correlation with previous years, shows that we can expect 2018 benchmark terms for copper concentrates to minimum roll over or be slightly higher than 2017," Schachler said.

Industry sources indicated to Reuters last week that copper processing fees were likely to edge down in 2018 to a five-year low in the face of limited supply growth and expanding smelting capacity in China.

Aurubis kept its copper premiums for 2018 unchanged at $86 per tonne from 2017. Schachler said this represented the company's positive outlook on the market and was not expecting much change from the current year.

($1 = 0.8613 euros) (Reporting by Zandi Shabalala; Editing by Sandra Maler)