Oct. 1 (Bloomberg) -- Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, has had its operating rates reduced at its Tenke Fungurume copper and cobalt mine because of frequent power failures in the past few weeks in the Democratic Republic of Congo.
The company is working with SNEL, the state-owned electricity company, and DRC authorities to resolve the issues, Eric Kinneberg, a spokesman for Phoenix-based Freeport, said by e-mail yesterday. Freeport operates Tenke and owns 56 percent of the mine. Lundin Mining Corp. has a 24 percent stake and the rest is controlled by Congo’s state-owned mining company.
Mines such as Tenke aren’t receiving power promised by SNEL, according to a statement on the website of Prime Minister Matata Ponyo. Mine operators risk “enormous losses” because of the power shortages, the government said.
Copper and cobalt-rich Katanga province has a power shortage of more than 300 megawatts, according to the government statement. SNEL is supposed to purchase power from neighboring Zambia to make up for part of the shortfall. The government met with Tenke representatives Sept. 27 and will make it possible for the unit to pay Zambia directly for power.
While Congo has about 2,400 megawatts of installed power capacity, the World Bank says mismanagement means only about half of it’s available. Glencore Xstrata Plc’s Katanga Mining project lost 67 days of output because of “recurrent general power disruptions” in 2012, Glencore said in its annual report.
Tenke “has made substantial investments with SNEL to secure reliable power on the Katanga grid, including the refurbishment of four turbines at the Nseke hydro power station that serves users on the Katanga network,” Freeport’s Kinneberg said. The impact at Tenke is primarily to the processing facilities, he said.
Freeport fell 0.5 percent to $32.92 at the close in New York. The shares have declined 3.7 percent this year.
In July Freeport, which completed most of an expansion at Tenke last year, forecast 2013 sales of 450 million pounds of copper and 24 million pounds of cobalt from Tenke.
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