August 3, 2021

Glencore slows down its copper-cobalt sector – Jeune Afrique

Due to the fall in prices, the Swiss giant has decided to suspend the activity of its mine in Mopani, Zambia, pending better days. A decision that follows the suspension of activities in Mutanda, DRC, last year, and that the local authorities did not appreciate.

With the current coronavirus epidemic, Glencore, a Swiss commodities giant led by South African Ivan Glasenberg, continues to reduce its wings in the African copper belt, straddling the DRC and Zambia.

In August 2019, Glencore had already suspended operations at its Mutanda mine, near Kolwezi, the world’s largest cobalt mine. In 2018, this mine produced 27,000 tonnes of cobalt, as well as some 200,000 tonnes of copper.

But its production was considered too unprofitable after the crash that the price of cobalt had just suffered at the time – used for the manufacture of electric vehicles, the ore had been the subject of strong speculation. Glencore therefore assured that it wanted to upgrade its facilities.

Several hours of detention for the boss of the Zambian mine

On April 7, for similar reasons and while copper prices are low – $ 5,119 per tonne on April 16, against more than $ 6,300 at the end of January – and cobalt has hardly recovered, the group Switzerland has just closed the Mopani site in Zambia. A stop of activity deemed untimely by the authorities of Lusaka who, on April 14, detained, for several hours, the boss of the mine, the Australian Nathan Bullock, on the grounds that the mining group had not warned the authorities of its decision only at the last moment and in an imprecise manner.

After the shutdown of Mopani, which produced nearly 119,000 tonnes of copper and around 2,000 tonnes of cobalt in 2018, Glencore now has only one operating mine in the region, that of Kamoto, in the DRC, in the hands of its subsidiary Katanga Mining, also close to Kolwezi.

Due to the coronavirus epidemic and in particular a three-day confinement at the beginning of April, its annual production rate – 234,000 tonnes of copper and 17,000 of cobalt in 2019 – has been revised downwards, even if Glencore, contacted by Young Africa, refuses to communicate the current extractive rhythm.

Loss of jobs and tax inflows

The Swiss group, whose mining activities lag far behind those of trading, is accustomed to abrupt decisions to stop production depending on market conditions. A corporate culture which has led to multiple conflicts with the authorities of the two countries of the African copper belt.

Beyond the major tax contributions lost due to the closure – around $ 1.3 billion in 2018 for the DRC due to the Mutanda shutdown – Glencore’s mines are large employers: no less than 6,000 employees direct and indirect suddenly found themselves without activity in Mutanda, and they are around 11,000 in Mopani.

If the group of Ivan Glasenberg, based in the discreet Swiss canton of Zug, argues to Young Africa its massive investments in the DRC and Zambia – to allow a full restart once prices have returned to good shape – the coronavirus epidemic is also slowing down maintenance and development operations, including in Kamoto, where the group indicates a delay in the construction of its new plant for the production of sulfuric acid, used for the treatment of ores.