Glencore to invest $950M to Mopani Copper Mine over three years

Switzerland-based mining company Glencore Inc plans to invest $950 million over three years to upgrading its Mopani Copper Mines in Zambia. The investment aims to refurbish the company's assets and lower production costs at its copper mine.

Mopani's production has been halting for 18 months due to a drop in price for copper.

Glencore said, as reported on Bloomberg, that the company continues to employ over 10,000 people at Mopani, and will be investing $950 million in site expansion and upgrades to extend the life of mine.

Glencore acquired Mopani Copper Mines in 2000 as a part of the general privatization of Zambian copper mining assets, supported by World Bank.

Mopani Copper Mine has the highest number of workers among private business in Zambia. The copper mine also has another 10,000 employees work for mining contractors in addition to the 10,000 workers employed by Glencore. Glencore estimates than each of their employees have an average of eight dependants.

Mining is the highest paying industry in Zambia. The lowest salary in Mopani is $680 per month, compared to the national minimum wage of $180.

Mopani paid contractor and supplier companies $800 million in 2014. The 68% was spent in Zambia, 59% in the Copperbelt region and 48% in Mufulira and Kitwe, the two closest towns to Mopani.

Mopani also has made contribution to Zambia's economic wellbeing and growth with over $250 million investment in the sustainable development of the communities in such areas as health, education, infrastructure, water and sanitation, agriculture, and sport.

However, the industrial metals markets have showed a temporary slowing demand growth. The price of the metal fell 18% this year as China cut demand for pipes, wiring and other building materials.In August, the copper price fell to $2.2 a pound, the lowest price in six years.

According to Reuters, Glencore plans to cut its copper, zinc and lead production in response to price declines in those markets.

Glencore's temporary shutdown will halt about 26% of copper output in Zambia. Glencore planned to cut the number of workers due to the temporary shutdown. Last month the company said that it would permanently cut about 3,800 jobs.

Glencore also reduces its $18 billion inventory pile to ease the concerns about its balance sheets. According to City A.M., Glencore shares fell 4.9% to 109.80p per share.

Other copper mines in Zambia also plan to cut copper production. Konkola Copper Mines of Vedanta Resources Plc cut 133 workers as it reviewed its Nchanga operations. CNMC Luanshya Copper Mines Plc said also suspend operations at its Baluba mine.