Two Glencore Copper Units Plan to Suspend Operations


Glencore reported on September 7 that two of its African copper producing subsidiaries, Katanga Mining in the Democratic Republic of the Congo and Mopani Copper Mines in Zambia, were reviewing their operations in light of weak copper prices, with 18-month suspensions of operations the likely outcome of the reviews. On September 11, Katanga Mining confirmed a decision to suspend its operations for 18 months. On September 23, Reuters reported that Mopani had notified the Zambian government that it plans to lay off more than 3,800 workers. The plan requires government consent before it can be implemented.

If both suspensions come into effect, they will remove about 400,000 mt of copper cathode from the market over the 18-month period. Work on expansion and upgrade programs will continue at both companies during the suspensions and is expected to provide material future reductions in overall operating costs.

The company said it will continue with planned investment of $880 million for processing plant upgrades and waste stripping of its KOV and Mashamba open pits. The processing upgrades include commissioning of a new leach plant that will replace the existing oxide concentration process. This is expected to significantly improve both copper recoveries and operating unit costs when processing resumes, with C1 costs expected to be reduced to about $1.65/lb of copper.

Katanga has a goal of minimizing the impact of the suspension on its employees and will retain a minimum of 80% of the existing workforce. Initially, a process of voluntary redundancies and voluntary early retirement will be followed before assessing the need for compulsory headcount reductions. During the suspension, the company will invest in a skills development program that will include work programs at other operations and the attendance of some staff at a technical school in Zambia.

Katanga will continue to operate its hospitals for the benefit of its employees and dependents and will continue to run its health projects, including various water supply projects. Following consultation with government of the DRC, the company will expand existing social projects, in particular farming, in response to headcount reductions.


As featured in Womp 2015 Vol 10 - www.womp-int.com