Glencore is looking to halt production at the Democratic Republic of Congo (DRC)’s Mutanda cobalt mine. This is following a dramatic fall in prices for the key battery metal.
In a statement from the Switzerland-based miner led by Ivan Glasenberg Mutanda is beinh shut down as it is no longer economically. The decision is the latest setback for Glencore in the DRC, following scrutiny of its relationships with Israeli businessman Dan Gertler and the imposition of higher taxes under a new mining code that was signed into law last year.
Glencore is under investigation by the US Department of Justice over its business practices in the DRC, among other countries. As such, shares in the company have fallen a fifth this year.
Glencore has however declined to comment. The FTSE 100 company will announce its latest financial results on Wednesday. The price of cobalt has fallen more than 40 per cent this year because of a surge of supply from the DRC, the world’s largest producer.
A critical metal for lithium-ion batteries in electric cars, the dramatic fall in prices for the metal has wrongfooted the mining and trading house. Last week, Glencore said that its trading arm would suffer a hit to earnings because of a collapse in cobalt prices.
Mutanda mine is the world’s largest producer of cobalt, which is mined alongside copper, and is one of Glencore’s key assets in the DRC. It produced almost 200,000 tonnes of copper last year and more than 27,000 tonnes, or a fifth of global supplies, of cobalt.
The mine will keep producing until the end of this year, after which it is expected to be placed on “care and maintenance” and could eventually restart production. Glencore has previously shut production in response to low prices, curtailing its zinc output in 2015 after a fall in prices.