Newcrest declares force majeure on Cadia contracts following dam breach
Newcrest Mining Ltd has declared force majeure on contracts for copper concentrates supply from its Cadia mine, where operations have been shut since March 10 due to a collapsed tailings dam.
The Australian company sent notifications to customers on Wednesday March 14 that it could not guarantee contractual supply of copper concentrates, two sources, who declined to be named, said.
A spokesman for Newcrest declined to comment, while referring to a statement made on Monday indicating that 2018 guidance would be adversely affected.
Newmont is in the process of reviewing its tailings facility at Cadia in New South Wales, Australia, where a tailings pool dam collapsed on Friday March 9, and is looking at possible alternative locations to store mining residues.
Cadia produced 63,805 tonnes of copper in concentrate in 2017. The immediate effect on the copper concentrates market and spot treatment and refining charges (TC/RCs) is as yet unclear, sources said.
“It remains a question in the market as to how long Cadia will be out, but we’re not expecting a long absence,” one source said.
“Some smelters have nearby shipments due from Cadia and if the force majeure lasts a long time, there will be an impact [on the market],” a second source said.
Copper concentrate TC/RCs fell in the first quarter of 2018 as the market priced in potential mine disruptions from labour negotiations in Chile.
Metal Bulletin’s copper concentrate index fell to a multi-year low of $68.80 per tonne/6.88 cents per lb at the end of February.