- The mining company CAMEC today announced it had "temporarily halted" all its copper and cobalt production in the Democratic Republic of Congo (DRC), not because of the war, but because of a sudden stop of demand in China.
The Central African Mining and Exploration Company (CAMEC) today notified investors and the press that all its operations in the DRC now were to halt. The London-based mining company is among the main actors in the DRC, also holding strategic investment positions in Congo's Katanga Mining Ltd.
"The decision is a swift reaction to a sudden steep decline in cobalt demand from China, as well as a further decline in the copper price. The prudent measures will result in a material reduction in costs," according to the company.
CAMEC officials say the company was monitoring the situation on a weekly basis. It would "recommence mining operations immediately" as "cobalt demand so warrants." Its DRC facilities in Mukondo, Kakanda and Luita would be left in a state that allowed for "rapid mobilisation," the company promised.
"In the meanwhile, a production holiday is being effected with recommencement anticipated in early 2009. During this period sales will be fulfilled from stock," the statement said.
Only a few months ago, before the global recession, CAMEC was highly optimistic about a quick expansion of its copper and cobalt production in the DRC. Investors were told that CAMEC's Congolese operations within a few years could turn into "the world's largest producer of cobalt."
CAMEC a few months ago anticipated producing 30,000 tonnes of copper cathode and 8,000 tonnes of cobalt concentrate metal contained during 2008-9. This, according to recent plans, would strongly increase to 100,000 tonnes and 12,000 tonnes respectively during 2010-11.
The London-based company has made sure to invest in both ends of the global cobalt and copper trade. CAMEC has a 78 percent interest in Zhejiang Galico, one of the largest chemical salt producers in China, specialising in the production of cobalt, nickel and copper inorganic salts and powders. These salts now are finding a much smaller market as the global recession starts hitting also China.
The halt in copper and cobalt production is the first major effect of the global recession noted in the DRC. But the mining sector is noting the recession all over the African continent as mineral and metal prices keep declining, including South Africa and Angola.
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