UPDATE 1-Glencore delays resumption of Katanga production to early 2018

Wed Aug 24, 2016 5:37am EDT
 
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KINSHASA Aug 24 (Reuters) - Mining and trading giant Glencore Plc will delay resuming production at its Katanga Mining unit to early 2018 due to stubbornly low copper prices, Chief Executive Ivan Glasenberg said on Wednesday.

Katanga announced an 18-month suspension of operations last September at the mine, which accounted for about 15 percent of Democratic Republic of Congo's copper production in 2014.

The company said in June that progress on $880 million in upgrades aimed at cutting costs was on track. However, Glasenberg said in a call with analysts that Glencore was in no rush to add to already oversupplied global markets.

Congo's mines minister Martin Kabwelulu told Reuters that Glencore's announcement was made without consulting the government and "will lead the government to ask Glencore for explanations".

The suspension and other cuts in Congo's mining sector due to low prices have cost more than 13,000 jobs since last year in Africa's top copper producer and caused output of the metal to fall 14 percent in the first half of this year.

Mining and the smaller oil industry account for some 95 percent of Congo's export earnings. The government slashed its 2016 budget by 22 percent in June and has cut its annual growth forecast from 9 percent to 4.3 percent. (Reporting by Mamidipudi Soumithri in Bengaluru and Aaron Ross in Kinshasa; Editing by Matthew Mpoke Bigg and Dale Hudson)