DRC - Katanga Mining, Glencore’s DRC-focused copper/cobalt company, has confirmed the decision to suspend the processing of copper and cobalt and expects it will last up to 18 months.

The company will continue with the planned investment of US$880 million into on-going processing plant upgrades and the waste stripping of the KOV and Mashamba open pits. These process upgrades include the commissioning of the new leach plant which will replace the existing oxide concentration process.

This is expected to significantly improve both copper recoveries and operating unit costs when processing resumes. C1 costs are expected to be reduced to c.$1.65/lb.

Commitment to regional upliftment remains a priority

Katanga aims to minimise the impact of the suspension on its employees and will retain a minimum of 80% of the existing workforce. Initially, a process of voluntary redundancies and voluntary early retirement will be followed before assessing the need for compulsory headcount reductions.

During the suspension, the company will invest in a skills development programme which will include work programmes at other operations and the attendance of identified staff at a technical school in Zambia.

The company and Mutanda Mining SARL will continue to invest in the INGA hydropower project, which includes the rehabilitation of the G27 and G28 turbines at INGA, along with increased power transmission from Kinshasa to Katanga.

In line with the commitment to responsible operations, during the suspension the company will also continue to operate its hospitals for the benefit of its employees and dependents and continue to run its health projects, including the various water supply projects.

It will also continue to invest in its planned 2016 CSR projects. Additionally, following consultation with Government of the DRC, Katanga will expand existing social projects, in particular farming, in response to the headcount reductions. These expansions will be implemented after engagement with the affected communities.

Representatives of the company have been in Kinshasa to meet with the relevant DRC government ministers including the prime minister, and have presented details on the suspension plan and whole ore leach (WOL) project. Katanga will take into account the issues raised by the government during these discussions.

Glencore has indicated it will provide or procure the additional funding required for the WOL project and other capital expenditure during the WOL project building and commissioning phase, in addition to any funding necessary for the care and maintenance related activities which will continue during the suspension period.

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