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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (30419)	12/16/2008 9:18:48 PM
From: LoneClone	Read Replies (1) \| Respond to of 193921

Congo slashes copper, cobalt goals as demand drops miningweekly.com By: Reuters Published on 16th December 2008 KINSHASA - The Democratic Republic of Congo has slashed copper output targets for the next three months by 30 to 40 percent and halved projected 2009 cobalt production due to factory closures and waning demand, the deputy mines minister said. Plummeting prices have hit Democratic Republic of Congo'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 percent maximum drop in copper production for the next three months," Deputy Mines Minister Victor Kasongo told Reuters in an interview. Following 2006 polls meant to draw a line under decades of kleptocratic dictatorship and armed conflict, investors spurred by high world market prices flocked to Congo's vast and largely unexploited concessions. However, 45 of 75 copper and cobalt treatment facilities have shut down in Congo's southern Katanga Province mining heartland, which has been broadly spared the violence continuing in eastern Congo despite the official end of a 1998-2003 war. Output forecasts for 2009, which had included major projects meant to come on-line during the year, have had to be revised. Congo's mines ministry now expects copper exports of 365 000 t, down from a pre-crash prediction of 410 000 t, but still up from 2008's projected 289 169 t due to expansions that have already come on-stream. "It's still a lot, but it could be worse," Kasongo said. "It's all the small shops in Asia that have subsidiaries here that are closing. Those 30 operators that are still producing should be able to export more," he said. Cobalt exports are due to fare even worse with forecast 2009 output more than halved to 32 000 t from a previous 65 000 t forecast and from projected 2008 output of 42 449 t. "Cobalt is mainly used for electronics, and electronics is now a problem. We cannot predict. For now it's down considerably. The biggest producers are at a standstill," Kasongo said. RESCUE EFFORTS Benchmark world copper prices on the London Metal Exchange have fallen by around 65 percent since reaching a record high of almost $9 000/t in July. Three-month copper was down 0,81 percent at $3 075 a tonne at 1118 GMT on Tuesday. Cobalt cathode crashed to $12/lb last week from a March high of $52,50, and closed at $16,50/lb on Monday. Firms like Katanga Mining, Anvil Mining and Central African Mining and Exploration Company have suspended some Congo activities as costs rise and prices fall. In a move to limit the damage done by falling prices and slacking demand from Asian markets, Congo said last week it would reduce mineral export taxes and royalties. The measures, intended to stimulate higher output from those companies still functioning, are renewable every three months. Demand is expected to rebound eventually but experts predict a lengthy economic slowdown in Asia may well mean more closures. "Demand will pick up, but the question is when," Federation of Congolese Businesses Vice-President Michel Losembe said. "Those companies with cash and those that are bullish will keep producing at high levels. Those that did not secure financing before the crash and cannot move because they now have nothing to export will shut down," Losembe said. Kasongo said Katanga provincial government predictions of 300 000 job losses were overblown, but said workers would be hit. "We didn't have 300 000 employees in Katanga. But we have 45 out of 75 furnaces that have shut down. Most that shut down were very artisanal and not very well structured," he said. "One furnace employs 80 to 100 people. But they depend on the diggers that bring the minerals to the furnace."