OZ Minerals will take a hit of up to $240 million, largely due to lower copper and gold prices.

The company expects its six monthly earnings results, due next month, to show a non-cash asset impairment charge of between $200 million to $240 million after tax.

It says the impairment charge was due to a combination of factors including lower than expected copper and gold prices.

“OZ Minerals relies on a consensus forecast to set these assumptions and recently there has been a significant reduction in forecast prices,” the company said in a statement on Monday.

The company also said higher asset values as a result of work towards developing the new Malu Underground mine in South Australia, and a landslip at the Malu open pit, had contributed to the impairment charge.

Shares in OZ Minerals dropped more than 2.5 per cent, or 10 cents, to $4.03 following the announcement.

OZ Minerals, which is Australia’s third largest copper producer, will release its half yearly earnings results on August 14.

The company last week cut its production guidance for 2013 to between 120,000 ounces to 130,000 ounces of gold, from the previous range of 130,000 to 150,000 ounces, as a result of the landslip.

It said the landslip reduced safe access to the mining area but the pit returned to normal operation in July.

But it retained its guidance for copper production of between 82,000 to 88,000 tonnes, with most of the production to come in the second half of the year.