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Report: China Molybdenum's Congo copper-cobalt mine misses H1 output target

The management of China Molybdenum Co. Ltd.'s Tenke Fungurume copper-cobalt mine in Congo vowed to keep jobs amid low prices and rising costs that are impacting profitability, Financial Times reported Aug. 21, citing a company letter.

Tenke Fungurume Mining SARL reportedly said the mine is facing issues such as declining ore grades and production instability caused by equipment problems.

After missing its first half production targets, management said it was also unsure if it could make up the shortfall later this year. Tenke Fungurume produced 40,523 tonnes of copper and 4,798 tonnes of cobalt in the first quarter. Full year 2018 output totaled 168,309 tonnes of copper and 18,747 tonnes of cobalt.

To retain jobs, management aims to reduce costs, streamline processing and boost production in 2020 with a new production line, the report said.

The technical issues only compounded woes in the mine, where several hundred troops were dispatched in June to remove thousands of illegal miners in the area.

China Molybdenum did not immediately respond to the newspaper's request for comment.

Earlier this month, Glencore PLC decided to shut down its Mutanda copper-cobalt mine in the country amid slumping cobalt prices and rising costs.

In January, China Molybdenum agreed to increase its stake in the mine to 80% for US$1.14 billion after initially acquiring a 56% interest in 2016 from Freeport-McMoRan Inc. for US$2.65 billion. Congolese state-owned miner Gécamines SA owns the remaining 20%.

The company is due to report results for the first half Aug. 27.