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Nearly a quarter of the world's major copper mines are running in the red, even after producers including Codelco [COBRE.UL] and BHP Billiton engage in their deepest cost-cutting in years, according to a Reuters analysis.

A 17-percent slump since last July has pushed copper futures on the London Metals Exchange to under $6,000 a tonne, the lowest since 2009, is the first major test of producers' margins since the global economic crisis, forcing a new reckoning after five years of relatively consistent profitability.

Codelco, the Chilean state miner that produces about 8 percent of the world's copper, will review the cost reduction plan at its Salvador mine as it prepares to restart operations there after torrential rains shuttered the complex in March, said a source close to the state-run miner.

The company has an ambitious target to slash total costs by as much as $1 billion this year.

Salvador produced copper at a cost of some $11,439 per tonne in the fourth quarter last year, the highest out of 91 mines analyzed by Thomson Reuters unit GFMS as part of its Copper Mine Economics database.

The mines account for more than two-thirds of global output, and almost a quarter of them had production costs late last year above current prices.

The GFMS analysis, which is based on quarterly and semi-annual filings by 26 mining companies, gives the deepest insight yet into the voracious pace of cost-cutting by miners late last year as the sell-off in copper quickened, a hot topic at CRU Copper's conference in Santiago this week.

In the final three months of last year, the industry's total costs on average fell by 6 percent to $4,426 per tonne quarter-on-quarter, the lowest since late 2013, GFMS said.

Investors are "increasingly concerned" about the cost curve, said Jeremy Sussman, mining equity analyst at Clarksons Capital.

OLYMPIC COSTS

Falling oil prices have saved fuel costs at open-pit mines that run big fleets of trucks, and the weak peso in Chile has cushioned costs for some miners in the world's top producer.

"They (miners) have done everything in their control. We're seeing the benefits of better discipline in costs, but copper prices are working against them," said GFMS metals analyst Bruce Alway.

The cost cuts - likely to have quickened in the first quarter - have eased pressure on margins, leaving producers in better shape as the market braces for a prolonged bear market as years-long robust demand from top consumer China weakens.

But it has also reduced the likelihood of vast production cuts from the 20 million tonne per year market that some traders say are needed to remove excess capacity from the market and trigger any kind of sustained recovery. Analysts expect a surplus of over 200,000 tonnes this year.

The highest-cost major copper mine was BHP Billiton's Olympic Dam in Australia, which was ranked 11th highest by cost at $7,321 per tonne. That's some $1,300 higher than three-month prices on the London Metal Exchange on Friday.

A BHP spokeswoman declined to comment on the study's findings beyond the company's first-half results in February. The mine also gets revenue from selling uranium oxide concentrate, gold and silver.

Miners often give costs for regions or divisions, but do not break down expenses for individual operations.

According to the methodology, GFMS calculated total costs based on copper sold and included mining, milling and treatment costs and on-site administrative expenses as well as depreciation charges and revenue from by-products.

It excluded royalties and taxes, capitalized development of stripping, head office costs and financing expenses. This is a better proxy for the outlay of sustaining production levels at a particular mine, GFMS said.

CLOSE TO BREAK-EVEN

Some producers have disputed the study's findings.

KGHM even said the GFMS estimate of $7,719 per tonne was too low for its five international assets, stretching from Sudbury in Canada to the Antofagasta region in Chile.

Fourth-quarter expenditure was actually higher than the GFMS estimate of $7,719 per tonne, a spokeswoman for the world's seventh-largest producer said.

Contrary to the GFMS study, which estimated costs had fallen by over 10 percent quarter-on-quarter, expenses were up due to stripping costs at its U.S. Robinson mine, she said.

Using the GFMS methodology, costs were $7,790 per tonne, up from $6,512 in the prior quarter in 2014 and $6,268 in the fourth quarter of 2013, a spokeswoman said.

A Glencore spokesman said the company does not "recognize" GFMS's findings, which pegged costs for Cobar and Ernest Henry in Australia at $6,116 per tonne.

Glencore's North Queensland operations had net costs, known in the industry as C1, after credits of $1.23 per lb in the final three months of last year, he said. That excludes depreciation charges.

North Queensland includes the near-century-old Mount Isa operation, Townsville refinery and Ernest Henry but excludes Cobar.