The Zambia Government has told Chambishi Metals plc it must shut down its cobalt smelter for 45 to 60 days in order to make repairs following an explosion last month in which its circuit was damaged.
The accident, which happened on January 21, is costing production of 7 t/d of the metal, said Bloomberg citing Zambian mines minister Kalomb Mwansa in a recent parliamentary speech.
Chambishi chief executive Derek Webbstock told Reuters last month the explosion at the smelter, located 420 km north of the capital Lusaka, occurred after water entered into copper cooling equipment, prompting a rise in the furnace`s pressure.
However, he added that the damage was not severe enough to affect Chambishi`s overall annual cobalt output – 6% of the world`s total. In the six months to June 30, 2006 Chambishi produced 1,643 t of cobalt.
The accident was one of the biggest in Zambia`s mining sector in recent years and comes soon after Chambishi was praised by the Zambian government for its safety record.
The Chambishi plant is owned by the Switzerland-based J&W Investment Group which also owns Luanshya Copper Mines which in turn provides cobalt and copper feed stock to Chambishi Metals which currently processes 50,000 t/y and 20,000 t/y of copper and cobalt ore respectively.
Although the global cobalt market is currently in balance, a protracted outage at Chambishi could cause prices to rise.
“We would probably see around 10% increase in cobalt prices due to market tightness,” Guy Darby from Darton Commodities Ltd told Mining Journal.
Cobalt is currently trading at US$25/lb after almost doubling in price during 2006.
Mining Journal
