Under pressure, Glencore’s Zambian copper subsidiary has announced its intention to close two shafts at its Nkana mine. This announcement reflects the Anglo-Swiss group’s desire to refocus on more profitable activities.
In the African subsidiaries of Glencore, the commodity trading giant affected by the fall in prices, the time has come for restructuring. After the Anglo-Swiss group announced last week its intention to suspend operations at its Mutanda Congolese cobalt mine, the world’s largest by production, it is now the turn of Mopani Copper Mines, the Glencore unit in Zambia, to bear the brunt of this reduction in activity. The company’s local management announced on Thursday its decision to close two of its shafts at its Nkana mine in the east of the country. This measure could result in a potential loss of 1,400 positions. However, the company’s managers made it clear that « job losses mainly concern external service providers and not the company’s direct jobs ». In fact, Mopani Copper Mines confirmed that it had sent notices of non-renewal for all external service contracts. However, this decision to reduce the sail area is not a surprise. « Our copper business in Africa did not achieve the expected operating performance. We have undertaken to address the challenges of Katanga and Mopani by making several management changes and overseeing a detailed operational review focused on many improvements to achieve consistent and profitable production at full capacity, » said Ivan Glasenberg, Glencore CEO, at the presentation of the second quarter results on August 7. In other words, in a context of high price volatility, the mining operator is required to regularly re-evaluate its asset map in order to maintain its profitability.
However, the Zambian authorities have little taste for this opportunistic logic. In the wake of Mopani Copper Mines’ announcement, the Zambian Ministry of Mines asked the company to reverse its decision to close both wells at its Nkana site, indicating at the same time that the management of the wells concerned could « if necessary, be entrusted to local contractors ».