Minería en línea
El portal de la Minería

Glencore deals mining blow to African copper producers

Glencore deals mining blow to African copper producers
Evalúa esta publicación

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/3f1d9664-562f-11e5-a28b-50226830d644.html#ixzz3lFk5Qo00

Glencore’s move to suspend operations at mines in the Democratic Republic of Congo and Zambia has dealt a significant blow to Africa’s top two copper producers.
The mining and trading group announced on Monday it was halting production at its Katanga mine in the DRC and its Mopani operation in Zambia for 18 months, as part of its new debt reduction plan.

Both mines are major contributors to the copper output of their respective countries. Katanga produces about 200,000 tonnes per year, the equivalent to roughly 20 per cent of the DRC’s copper output. Mopani’s shafts produce about 110,000 tonnes per year, equal to 15 per cent of Zambia’s output.

Another 110,000 tonnes of copper is processed through Mopani from other miners, mostly from First Quantum’s Kansanshi mine. But there are smelter facilities elsewhere in the country to cater for that while Mopani’s operations are suspended, if there is sufficient power supply. First Quantum opened a new $815m smelter at Kansanshi last year.

Glencore insisted it was committed to mining in both countries and said it will use the period to develop and modernise the shafts, which have been lossmaking since the price of copper dropped to below $6,000 a tonne.

“We do have regard for Africa, we are committed to Zambia and the Congo and we are showing it because we are there modernising and investing,” said a Glencore spokesman.

But the decision to suspend the mines’ output comes at a particularly bad time for copper-dependent Zambia, which relies on the metal for about 70 per cent of its foreign exchange earnings and 25 to 30 per cent of government revenue. Lusaka is already struggling to narrow a wide fiscal deficit and has seen its currency drop to all-time lows against the US dollar.

In addition, Luanshya Copper Mines said this week it would suspend operations and cut jobs at its Baluba mine in Zambia.

Miners in Zambia have also been impacted by power shortages and policy uncertainty as the government has altered the industry’s tax regime. The miners, which also include Barrick Gold and Vedanta, are also owed about $800m in a dispute over value added tax repayments. Glencore is due about $300m.

Mining has also been a key driver of economic growth in the DRC. Its mining industry is more diverse that Zambia’s, as it produces cobalt, gold, tin and diamonds, but the suspension of Katanga will still be keenly felt.

“While the [DRC] economy is more diversified [than in Zambia], the source of the government’s revenue is not,” said John Ashbourne, economist at Capital Economics.

“It’s the only source of export revenue and the only source of hard currency because much of the rest of the economy is informal.”

Glencore employs about 8,000 people at Mopani and 5,000 at Katanga, excluding thousands of contractors. It is unclear how many jobs would be affected by the suspensions, but large numbers of employees are expected to be kept for the mines’ development.

At Mopani, Glencore plans to invest $500m over the next 18 months as it develops three new shafts, raising the mine’s output to about 140,000 tonnes per annum while reducing production costs.

At Katanga, it will invest $900m to develop and modernise the mine and raise output to about 280,000 tonnes per annum while also cutting costs.

Financial Time



Deja una respuesta

Su dirección de correo electrónico no será publicada.