Cathode output at Glencore’s African copper businesses is set to be cut by 400,000 tonnes as a result of operational reviews at Katanga Mining and Mopani Copper Mines, the Switzerland-based miner and trader said on Monday September 7.
“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,” Glencore said in a statement to investors.
Katanga Mining announced that it has commenced a review amid a challenging environment on Sunday, and on Monday Glencore added that a similar review is also being undertaken at Mopani.
Glencore estimates that the suspension of both operations will remove approximately 400,000 tonnes of cathode from the market. Cobalt production will also be affected, Katanga said on Sunday, although Glencore did not provide an overall figure for estimated cobalt output losses.
Glencore produced 8,100 tonnes of cobalt from all of its African assets in the first half of 2015.
The company will continue to fund the expansionary and upgrade projects at Katanga and Mopani. Once completed, these projects will result in a material reduction in overall operating costs at both mines, Glencore said on Monday.
Once complete, C1 costs at Katanga are expected to be reduced from about $2.50 per lb now to $1.65 per lb, while C1 costs at Mopani will reduce from $2.50 per lb to $1.7 per lb, Glencore said.
Mutanda Mining, another of Glencore’s subsidiaries, is still performing well, and is producing above nameplate capacity at a C1 cost of $1.33lb, Glencore added.
Glencore’s total African copper production rose 10% year-on-year to 232,500 tonnes in the first half of 2015, with Katanga up 6%, Mutanda up 7% and Mopani up 21%