ERG suspends copper, cobalt production at Chambishi

Production of copper and cobalt has been suspended at the Chambishi refinery in Zambia due to constrained supply of imported feedstock.

The suspension follows the introduction of a new 5% duty on cobalt and copper concentrates imported into Zambia that came into effect this year. The Chambishi refinery processes feed from ERG’s Boss Mining and Frontier Mine in the Democratic Republic of Congo.

“In light of recent developments related to the import of feedstock into the Republic of Zambia and following discussions with relevant labor union representatives, we have temporarily suspended operations at Chambishi Metals with 351 workers placed on paid leave,” a spokesman for ERG Africa confirmed to Fastmarkets.

“We are exploring all options in order to resume operations as soon as possible,” he added.

Copper producers in Zambia have been considering production cuts as a result of the new import duty. Konkola Copper Mines cut its operations in Ngchanga copper smelter last month amid lower availability of concentrates, for example, Fastmarkets reported at the time.

Chambishi has the capacity to produce 55,000 tonnes per year of grade A copper cathodes and 6,800 tpy cobalt in the form of broken cathode, though output of the latter has been declining in recent years due to declining output from Boss Mining. Chambishi produced about 2,300 tonnes of cobalt in 2018.

Fastmarkets’ benchmark standard-grade cobalt price, which takes account of broken cathodes produced at Chambishi, fell to $17.30-19.45 per lb, in-warehouse Rotterdam, on Wednesday February 13 from $25.75-27.25 per lb on January 4.

Metal prices have slumped since the beginning of the year under pressure from good availability of cut cathode and oversupply at other points along the cobalt supply chain.

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