Eurasian Resources Will Cut at Least 1,300 Congo Mining Jobsby
Job cuts may increase to 1,800 if copper prices don't recover
Congo may lose as much as $1.3 billion in resources revenue
Eurasian National Resources Corp. said it will cut at least 1,300 jobs in the Democratic Republic of Congo as part of a cost-reduction strategy after copper prices plunged.
Most of the positions will be eliminated at Boss Mining and sub-contracting firm Congo Cobalt Corp., starting with giving workers the option to leave voluntarily, spokesman Patrick Mulumba said by phone Wednesday. The job reductions may increase to 1,800 if copper prices don’t recover, he said. ENRC, owned by Luxembourg-registered Eurasian Resources Group, has five mining companies in Congo.
“We are hoping between 1,300 and 1,500 workers will accept” a voluntary arrangement, Mulumba said. In addition, the company’s Comide copper and cobalt project will be placed on care and maintenance, he said in an earlier e-mailed response to questions.
Congo is the world’s largest source of cobalt, used to make rechargeable batteries, and Africa’s biggest copper producer. Copper prices have rebounded since declining to a six-year low in January and dropping 25 percent last year as slowing growth in China hurt demand. Copper for delivery in three months gained 0.2 percent to $4,799 a metric ton on the London Metal Exchange on Thursday.
Congo’s government said in January it could lose as much as $1.3 billion this year in combined mining and oil and gas revenue because of the commodities crash. Glencore Plc in September announced it will halt copper and cobalt output at one of the country’s largest copper mines as part of a cost-cutting exercise.
Congo Cobalt is fully owned by ENRC, which has a 70 percent stake in Boss Mining alongside state-owned miner Gecamines.
The company owns at least 25 percent of the smaller Comide project, which paid $7.16 million in taxes to Congo’s government in 2014, according to a report by the Extractive Industries Transparency Initiative. Boss and Congo Cobalt together paid $96.5 million in taxes that year, the report shows.
Eurasian is trying to achieve a “leaner, more efficient operating model” in Congo amid weak copper prices, Mulumba said. The company still plans to boost output at Boss by about 50 percent this year, he said.