Glencore Closes Two Mine Shafts at Zambian Unit
August 09 2019 - 4:59AM
Dow Jones News
By Nicholas Bariyo
Glencore PLC (GLEN.LN) has closed down two shafts at its Mopani
Copper Mines unit in Zambia to curb spiraling costs in a move that
leaves hundreds of miners jobless, company and union officials said
Friday.
A spokesman for the Zambian unit said that closedown would allow
the company to channel funds toward the completion of other
expansion projects at Zambia's third-largest copper and cobalt
producer.
The development comes just days after the mining giant announced
plans to close its largest copper-and-cobalt mine in neighboring
Democratic Republic of Congo, amid falling commodity prices, as
concerns grow over the health of the global economy and the trade
friction between the U.S. and China.
"Mopani Copper Mines will now focus on our new essential capital
projects" the spokesman said in a statement. "The closure of the
two uneconomic shafts was always part of our plans"
Union officials said that closure would render more than 1,000
workers jobless, threatening to stir industrial unrest on Zambia's
Copperbelt province. Mopani produces around 100,000 of metric tons
of copper annually.
The layoffs may further fray strained relations between mining
companies and Zambian authorities, as Africa's second copper and
cobalt-producing nation grapples with soaring public debt.
In May, President Edgar Lungu threatened to revoke licenses of
Vedanta Resources and Glencore after the companies announced plans
to scale down operations and cut jobs, citing spiking costs. The
government has since initiated proceedings to liquidate Vedanta's
assets in the country. There was no immediate reaction from
Zambia's ministry.
Economists at South Africa-based NKC African Economics expect
Zambia's mining sector to contract by 2% this year following an
expansion of 6.3% in 2018, amid a spat on new taxes.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
(END) Dow Jones Newswires
August 09, 2019 04:44 ET (08:44 GMT)
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