Glencore Plc announced yesterday that it will suspend of production at Mopani and Katanga mines in Zambia and the Democratic Republic of the Congo respectively for 18 months.During this time the company will build new processing facilities that will lower output costs, the Baar, Switzerland-based commodities supplier and trader said Monday.
A suspension of operations will remove approximately 400,000 tonnes of copper cathode from the market about a quarter of the countries’ copper output.This decision will also eliminate hundreds of millions of dollars in taxes and kill thousands of jobs.Not a good prospect a year before elections.
Mopani is the largest employer among Zambian mines and accounts for about 26 percent of the country’s production.
The company outlined a $10 billion debt- reduction plan and said it proposes to sell about $2.5 billion in new shares and assets valued at as much as $2 billion. It will also suspend dividend payments.
“The copper suspension is starting immediately,”’ Glencore CEO Ivan Glasenberg said during a conference call about the debt-reduction plan. “Right now, we will get into effect.”
Baar, Switzerland
7 September, 2015
African Copper – Operational Update
Glencore notes the announcement made by Katanga Mining Limited (Katanga) on 6 September that the Management of Katanga has commenced a review of its business,including operations and expenses, in light of the challenging environment for commodities.
A similar review at Mopani Copper Mines (Mopani) has also commenced.
This will include the suspension of production at Katanga and Mopani for 18 months up until the completion of the expansionary and upgrade projects. This includes the whole ore leach at Katanga and the new shafts and concentrator at Mopani.
A suspension of operations will remove approximately 400,000 tonnes of copper cathode from the market.
The expansionary and upgrade programs will provide a material reduction in overall operating costs at both operations. Once complete, the programs are expected to reduce C1 costs at Katanga and Mopani to c.$1.65lb and c.$1.70lb respectively from more than c.$2.50lb today.
Glencore will continue to fund the expansionary and upgrade projects at both operations.Mutanda Mining continues to perform well, producing above name plate capacity at a C1 cost
of $1.33lb.
We are but a scratchable spot on someone else’s boardroom presentation and it is our own fault. I am sure that obnoxiously wealthy Swiss town couldn’t care less. Why don’t you move your toxic smelters in to their backyards during your break. Back to the naughty chair for me. I have little love for Glencore.
When I was a kid learning social studies I was told Zambia needs to diversify and stop it’s dependence on copper.I am now an adult and we still haven’t diversified and are paying for the price dearly.Zambia we are in trouble!!! We are going to lose a quarter of the monies we have been earning form the mines,we have no power and our cabinet is sitting planning independence day celebrations,their next shopping abroad and how many more blankets the first lady should donate,,,and ofcourse the next by elections…..
The country is shutting down…
Stop it- economically this Company are down the right thing.
Stop relying on things being Rosy for you.
Zambia is dependent on copper not because of Lungu, because of yourself, what are you doing to help the cause? The Government is not so suddenly detached from your inputs you see.
Stop acting a little clever when you somewhat term this Govenment as a miracle generator.
We are affected and need to start increasing the small scale industry. For all I know diversification is clearly there, we have a big percentage of people working in service industries which never existed.
Grow up, I am not impressed here in Glasgow
Thanks
BB2014
As things fall apart for Edgar Lungu. This is the presidency you were hungry for without knowing the demands of the job
@ Mushota……For the first time you have have spoken sense !! i totally agree with your post. Zambian problem is not the government but it’s own citizens and it’s people who think a sitting government will perform miracles for them.
Work up fellow citizens it is you to change your attitude and Afircan thinking !!
@ Mushota……For the first time you have have spoken sense !! i totally agree with your post. Zambian problem is not the government but it’s own citizens and it’s people who think a sitting government will perform miracles for them.
Work up fellow citizens it is you to change your attitude and African thinking !!
That is just scaremongering guys.
Hon Kambwili will VEHEMENTLY INSTRUCT them to keep Nkana and Mufulira mines open.
DO NOT DESPAIR!!!
Despite his size, Kabwili is just a mosquito in the ears of Glencore.He has no power or influence over a multimillion dollar company that provides Zambia with a quarter of its wealth.
Kambwili will threaten them muzugus and his boss will let him go free you are on trouble with no plan and answers.
Atleast Kitwe will free of ama ovaro namajombo. The roads will be decongested. Bashi Mine very boastful
This is what happens when a people fail to take responsibility for their own destiny! When I saw this news highlight on Bloomberg I thought “ooh may be they have not written it well” but here we are with a written statement. KK nationalized the mines and other enterprises for similar reasons as these but he and his cohorts failed to take enough responsibility to run the mines responsibly! There was too much political interference that made our mines run at losses despite having very qualified personnel trained in some of best institutions in the world. The Chileans are still operating their government controlled congromelate COLDECO profitably and even wanted to buy some of our mines! We could have done the same!Foreigners will only come and mine when it fits them and will close shop…
These guys at Glencore will feel the wrath of Kambwili. Kambwili warned these miners that who ever lays off people will be dealt with.
Let me grab some popcorn and watch what Kambwili will do. Kekskskikikikisksls;sk
Zccm-IH should wake up from docility and begin taking up of operations of these mines. These idyots will only mine where they can steal and avoid paying taxes. Let’s start running these mines from production value addition even finished product and export them. That’s when we are going to earn meaningful forex. There are so many mineral elements in copper ore which we are busy exporting in its raw state which we can gain massively from.
@Sponge bob,one would wish to agree with you but look at our history of running state enterprises!! Zamtel has been making losses when all telecom companies are making profits! We had nationalized the mines in the past but the leaders of that time failed to differentiate between politics and the real serious economic issues. Our mines made losses and became a liability to the economy instead of the opposite. We have a refinery in Ndola and a precious metals unit that was accounting for other metal constituents extracted in the refinery process all that run down. We can nationalize but as a nation we lack the discipline for running state enteprises that is why are a fertile ground for foreign investors of all hues!
When copper was at peak prices, they went on a spending spree while over charging the pipo. Then they went on a borrowing frenzy with increased over inflated invoices for so called capital projects. Many in PF are $ millionaires with luxury mantions in SA. The fight against corruption is 0. Our leader has never ever uttered the word corruption incase it follows him around.
things are really falling apart.
Learn from Malaysian Government in the quest for quick solutions in economic transformation within a short time frame in key national priority areas such as poverty,healthy,economy and unemployment including energy and mining creating short-term milestones in the NDP plans without necessary being locked in the MTFS
Its time a round table was called to discuss the mining impact on prices and energy shortages to reconfirm down wet and map up the strategy even amidst mining revenue impairments impacting huge losses on global mining to ensure all is sustained Its not typical to Zambia alone
Malaysian government achieved significant government and economic transformation within…
Malaysian government achieved significant government and economic transformation within a very short time. Using this approach, they addressed national key priority areas such as poverty, crime and unemployment
It will also help to see Genuine Mining partners of all times
We are discussing the repercussions of having MOPANE put on care and maintenance for 18 months. This is disastrous and does not warrant the unanalysed rantings by Patrick. This is an issue of bread and butter for the miners and their families. What is the GRZ going to do about this situation? If we are being forced to nationalise the mines because they are unprofitable, let’s source for a mining management expert organisation to send in experienced brains to start operating these mines and still earn a profit against all odds.
Oil marketing companies have resilience against this kind of economic evironment where the commodity price has gone down to ebbs. They devise models of operations where they remove middlemen who share their profits. We can still come out of this stronger, we just…
When companies fail the managment is changed. You can not Polish a turd. No matter what you do the same manegers of the country will fail. You have to change the managment. Sorry if that incudes you. Nothing PF can do will reprive the country. They are full of hopeless ministers only intrested in building the most expensive roads in the world. How can it be lungu only from the whole PF to bring to our attention that we import cut chips and fish??.
Kambwili will come out ranting without taking the time to understand this decision, for them it’s always about politics.
not to sound too selfish, but…. how much power does this free up for the grid???
The decision by Glencore is logical. Frankly, at the moment, with the falling Kwacha value and low copper prices, it is a very shrewd business decision. Kambwili forgets that Zambia is a free market economy and government cannot intervene in such operational decisions.
The problem we have as zambians is that to us everything is politics.
Smacks of a pattern.
Remember Anglo’s sudden pull out from KCM?
Do you smell a rat like me?
Glencore is the only investor who wants to prop up copper prices, why so?
How come that a decision which affects the life and existence of a country was taken without first informing the government?
What if the objective is to fall down a government and replace with someone much user friendly, like yesterday?
You know, as it was with Anglo.
what is it that you people don’t understand!!! They are making a loss due to world markets plummeting….IF THEY STOP PRODUCING NOW THEY WILL HOPEFULLY REDUCE THE EXCESS COPPER THAT IS ON THE MARKET AND HOPEFULLY PRICES WILL IMPROVE they are not shutting down forever….they are going to do expansions so that they can in future reduce costs….in 18 months they will reopen and hopefully go back to full production……IS EVERYONE CLEAR NOW!!!
souffré ce pour un temps mais le gros du problème ce bon nombre des agents vont au chomage et kabila lui reste toujours au pouvoir
ce grave
Mr. Kanyinda. Le problem c’est pas Kabila, mais c’est plutot une decision normal de la part de Glencore. C’est ca au faite le business of mining et la privatization. C est les consequences des privatiser le secteur des mines quant un privee prend une decision pareil sans tenir compte sur la repercution des vies des travailleurs et l’affection de l’economie nationale.
Anyway the business of mining tell us four major phases: Exploration – Mine Planning – Operation – Mine closure & Post closure. During the business, they may have issues related to the actual metals or commodities prices or / and their business economical issues which may lead the business to the last phase of “mine closure”. But we also that they will put the mine on “care & maintenance” in order to keep the…
people hold on<what makes you so sure that the will reopen or restart production after 18 months???????we just need to take it up from here,late the zambian government take over the mines,zambia is a rich country so the said in the 90s,the government need a quick alternative ASAP,how main employees and families will be affected thousands,it should be a lesson and the government need to put up plan B in the near future,we need leaders how can over look the governance of the country/ the people,PF is the west part ever.