Glencore is going to reconsider its decision to shut down Zambia’s Mopani Copper Mines. This is on condition that the mining firm reaches an agreement with the Zambian government.
According to media reports, Glencore wanted to shutter the mine due to disruption of its operations by the coronavirus crisis and low copper prices. Additionally, Zambia’s mines minister has said the company is “fishing” for ways to lay off workers, and 11,000 jobs could be at risk.
Glencore’s announcement of the temporary shutdown on April 8 sparked a backlash from the government, which said Glencore did not give it sufficient notice and threatened to revoke MCM’s mining licenses.
In a statement released by the company earlier on this week, Glencore explained that if an agreement is reached Mopani will re-start mining operations and issue a notice of its intention to place the mining operations on care and maintenance after 90 days. Further and during this period, Mopani will continue to engage with the government on potential solutions to its current challenges.
Zambia’s mines ministry said MCM must deliver a “detailed plan” on how it intends to proceed in the 90-day period and “possibly” beyond, adding that MCM would defer some non-production activities and cut capital expenditure in order to unlock cash flow.
The ministry also said MCM must restructure its cost profile in order to become profitable and start paying corporate income tax.
Charles Sakanya, chief engineer at MCM, has been appointed acting CEO after the government allowed CEO Nathan Bullock to leave the country, the ministry added. Bullock had been briefly detained at Lusaka airport on April 15.
MCM, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s mining investment arm.
