Glencore, DRC to meet over closure

THE DEMOCRATIC Republic of Congo’s (DRC) government would hold talks with representatives from Glencore about the company’s plans to suspend operations at one of the nation’s biggest copper mines, an adviser to Prime Minister Augustin Matata Ponyo said.

A Glencore delegation was expected to arrive in the capital, Kinshasa, yesterday, the adviser said. The government would ask company representatives to provide assurances that employment levels and planned investment would be maintained, said the adviser, who asked not to be identified because the information was not public. Glencore spokesman Charles Watenphul declined to comment on the visit.

Glencore, based in Baar, Switzerland, announced this week it would suspend copper and cobalt output at Katanga Mining for 18 months as it built new processing facilities to lower output costs.

Katanga Mining accounted for 28 percent of copper production last year in the DRC, Africa’s biggest producer of the metal, and employs more than 5 000 people, according to the company’s annual report. The DRC’s government understands that the shutdown may not last as long as 18 months and that the announced length of the suspension was indicative, the adviser said.

The lost revenue would be balanced by income from other mining companies and from the economic diversification programmes under way, the adviser said.

Other companies that operate mines in the DRC include MMG, an indirect subsidiary of China Minmetals; Phoenix, Arizona-based Freeport McMoRan Corporation; and London-based Randgold Resources.

Katanga Mining is a major tax payer in the DRC, with its operating subsidiary Kamoto Copper declaring $298.8 million (R4.08 billion) in combined taxes in 2013. That made it the single biggest tax payer in the mining industry that year, according to a report by the Oslobased Extractive Industries Transparency Initiative.

Glencore is also suspending output at Mopani Copper Mines in neighbouring Zambia. Mopani is the biggest employer among Zambian mines and accounts for about 26 percent of the country’s copper output. Both Copperbelt mines are relatively high-cost components of Glencore’s copper portfolio.

Both are scheduled to undergo major upgrades over the next year or so to reduce those costs. A shaft infrastructure rebuild at Mopani and a buildout of whole ore leaching capacity at Katanga would slash costs. The work is scheduled for completion in the first half of 2017. – Bloomberg