SMM, Feb. 21: earlier this week, foreign media reported that Glencore plans to cut production at Mutanda, one of its largest copper and cobalt mines in the Congo. The mine accounted for 20 per cent of the global supply of cobalt last year. The COMEX copper short line rose more than 2.6 per cent after the announcement. Reported that the reduction in production of Mutanda Mining Sarl, a copper and cobalt mine in the Congo, may be temporary, as the company is looking for new copper mining methods.
Glencore has three mines in Africa, Katanga Mining in the DRC, Mutanda Mining in the DRC and Mopani in Zambia. Glencore released its 2018 full-year production report on February 1. Copper production rose 11 per cent to 1.454 million tonnes in 2018 from a year earlier, mainly due to the restart of its processing business at Katanga (Katanga). Due to the time of shipment, sales of its own copper during 2018 were about 22000 tons lower than production. The company expects copper production to be 1.54 million tons in 2019, fluctuating 45000 tons up and down.
Glencore also plans to cut about 2000 jobs at the mine in Africa, most of them contract workers. In addition, relations between the Mutanda mine and the Government of the Congo have been strained. Earlier, the Democratic Republic of the Congo had amended its mining law to triple the use of cobalt. Mutanda is an important source of employment and taxation in the Democratic Republic of the Congo.
SMM believes that Mutanda's annual copper production of 199000 tons is only a small copper mine, far less than its cobalt production accounts for 20% of the world's cobalt production, the market reaction to its planned production reduction is mediocre. Glencore also said that the production reduction is only temporary, the aim is to transition from the original open-pit copper mine to underground copper production mode, the overall probability of production reduction is not large. Assuming that Mutanda cuts production as expected, raising concerns about an increase in disruption and driving a downward trend in TC, it is more noteworthy whether the reform of the Democratic Republic of the Congo's gold mining tax law will lead to Glencore-like operations at other copper mines.
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