Glencore's Plans to Close Zambian Copper, Cobalt Mines Rejected by Zambian Government

By Nicholas Bariyo

Glencore PLC plans to suspend copper and cobalt output in Zambia for three months after it declared a force majeure related to at least two mines amid the worsening economic carnage caused by the coronavirus pandemic, said Richard Musukwa, minister of mines and mineral development, on Tuesday. The Zambian government has rejected the plans, he said.

According to Mr. Musukwa, the government has rejected the company's plans to close the mines because the reasons being cited are not adequate and "do not conform with the Law." Glencore's decision comes days after it announced that it was reviewing its Zambian operations amid spiraling costs and uncertainty caused by the coronavirus pandemic.

Mr. Musukwa said the government won't let the commodities giant hastily close operations and cut over 1,100 jobs. Glencore produces around 120,000 tons of copper every year at its Zambian units. A company spokesman couldn't provide any immediate comments.

"The Ministry is not aware of any event that has happened...which makes mining impossible," Mr.Musukwa said. "The measures taken by government to mitigate the effects of COVID 19 have hitherto not been a lock down but steps to allow commerce to continue in the country, especially the mining sector," he said.

Last year, Glencore closed its giant Mutanda mine in the neighboring Democratic Republic of Congo amid sliding metal prices. Copper and cobalt prices have taken a hit since late last year, amid concerns over the global economy, and the trade war between the U.S. and China also hit commodity prices. The outbreak of the coronavirus has compounded mining companies' woes.

Write to Nicholas Bariyo at [e-mail]

(END) Dow Jones Newswires

April 07, 2020 10:29 ET (14:29 GMT)

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