Kinshasa, DRC — MININGREVIEW.COM — 19 December 2008 – The government of the Democratic Republic of Congo (DRC) has slashed copper output targets for the next three months by 30 to 40% and halved projected 2009 cobalt production, due to factory closures and waning demand.
Reuters reports from the capital that plummeting prices have hit the DRC’s copper and cobalt belt hard as financing has dried up, forcing companies to delay development or suspend operations in what had been one of the world’s most promising new exploration areas.
“Compared with what we expected without the crisis, we are predicting a 30 to 40 % maximum drop in copper production for the next three months,” deputy mines minister Victor Kasongo told Reuters in an interview.
Following the historic 2006 election, investors – spurred by high world market prices – flocked into the DRC’s vast and largely unexploited concessions.
However, 45 of 75 copper and cobalt treatment facilities have shut down in the DRC’s southern Katanga Province mining heartland. Output forecasts for 2009, which had included major projects scheduled to come on-line during the year, have had to be revised.
The DRC Mines Ministry now expects copper exports of 365 000 tonnes, down from a pre-crash prediction of 410 000 tonnes, but still up from 2008’s projected 289 169 tonnes because of expansions that have already come on-stream.
Cobalt exports are due to fare even worse with forecast 2009 output more than halved to 32 000 tonnes from a previous 65 000 tonnes forecast and from the projected 2008 output of 42 449 tonnes.
“Cobalt is mainly used for electronics, and electronics is now a problem. The biggest producers are at a standstill,” said Kasongo.
Firms like Katanga Mining, Anvil Mining and Central African Mining and Exploration Company have suspended some activities in the DRC as costs rise and prices fall.
In a move to limit the damage caused by falling prices and slacking demand from Asian markets, the DRC Government said last week that it would reduce mineral export taxes and royalties. “Demand will pick up, but the question is when,” said Federation of Congolese Businesses vice-president Michel Losembe.