Glencore's Congo Copper Mine to Keep Most Workers Amid ShutdownBy
Katanga Mining pledged to retain at least 80% of its workers
Company plans to invest $880 million to revamp operations
"The company aims to minimize the impact of the suspension on its employees and will retain a minimum of 80 percent of the existing workforce," Katanga Mining said in a statement Friday. It employs more than 5,000 people, according to its annual report.
Glencore, a Baar, Switzerland-based commodities supplier, announced this week it will suspend copper and cobalt production at Katanga and the Mopani mine in Zambia for 1 1/2 years to build new processing facilities that will lower output costs. Congo is the top copper producer in Africa and Zambia is the second largest.
Katanga Mining will invest $880 million on a whole-ore leaching facility and waste stripping at the KOV and Mashamba open pits in the country’s southeast. The investments are meant to lead to cost savings on production, which Glencore now estimates at more than $2.50 per pound of copper.
Copper for delivery in three months sank 0.5 percent to settle at $5,370 a metric ton ($2.43 a pound) on the London Metal Exchange on Friday.
The commitment on preserving jobs follows meetings between officials from Katanga Mining and the government of Congo over the past 48 hours. The delegation met with Prime Minister Matata Ponyo and the ministries of mines, portfolio, finance and labour, according to the statement from Katanga Mining’s operating unit, Kamoto Copper Co. No one from the Mines Ministry was immediately available to comment about the meetings.
Glencore will arrange funding for the investments, according to the statement. That may add debt for Katanga Mining, which said in November that through Kamoto Copper it already has a $2.97 billion debt facility with Glencore.
Glencore this week 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.
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