Government Shuts Seized Copper Mine as Prices Soar

The government has recently halted production at Konkola Deep, a mine which it seized from Vedanta Resources Ltd, just as copper prices surge.

The government’s decision to halt production was triggered by a shortage of funds to develop the mine after it started the liquidation process.

This comes as copper prices surged back to $10,000 a tonne on Thursday as major industrial economies start to re-open. With copper accounting for 73% of exports, a halt in copper production at the mine at a time so crucial as this, is concerning.

Barnaby Mulenga, permanent secretary in the Ministry of Mines, commented on the issue by saying that “This [Konkola Deep] is a giant which is sleeping, and we remain positive that it will be mined at some point”.

As the second largest copper producer in the world, this surge in price could have been the perfect opportunity for the government to bring in large profits from copper production, had they implemented correct funding at the mine to ensure continuation of production.

Vedanta were committed to investing $1.5billion into Konkola Copper Mine (KCM) before a state-appointed liquidator split up the KCM and sold its assets. Had Vedanta continued its involvement in the mine, production would almost certainly not have been halted.

Vedanta has said that it is “saddened” by the halt of production at Konkola Deep, given its previous and future investments expected to exceed $3 billion, to help make operations profitable.

Such concerns mount on issues related to government debt which has been accrued by the Patriotic Front. Although copper production rose to a record last year the government still managed to default on external debt payments.

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