VANCOUVER — Copper producers have seen margins come under pressure as spot prices for the red metal have hovered near six-year lows and look poised to remain stuck below the US$3 per lb level over the medium term. London-based Glencore (LON: GLEN) is the latest to respond to the price environment by opting to shutter copper operations in an attempt to lower unit cash costs.
On Sept. 7 the company said it would be suspending work for around 18 months at the Katanga copper operation in the Democratic Republic of Congo and the Mopani copper mine in Zambia.
The shutdown is part of a business review that Glencore hopes will decrease its copper cash costs to around $1.68 per lb at both operations, which produce the red metal at around $2.50 per lb at the time of writing.
The company figures that the suspension will remove roughly 400,000 tonnes of copper cathode from the market, which equates to around 1.2% of forecasted copper supply in 2016 on an annualized basis.
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