Glencore Closes Two Mine Shafts at Zambian Unit

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 [e-mail]

(END) Dow Jones Newswires

August 09, 2019 04:44 ET (08:44 GMT)

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