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Glencore's Katanga nearly triples Q1 copper production QOQ after mining restart

Katanga Mining Ltd. said May 14 that first-quarter contained copper production nearly tripled to 27,019 tonnes, representing a rise of 185.6% from the fourth quarter last year, after ore mining resumed in late 2017 following the completion of phase one of the WOL project, part of the Kamoto copper operation in the Democratic Republic of the Congo.

The Glencore PLC unit produced 9,459 tonnes in the previous three-month period.

Mined ore was 836,539 tonnes in the quarter. Waste mined increased to 9.9 million tonnes, from 7.5 million tonnes during the comparable quarter a year earlier, but lower than 11.2 million tonnes in the fourth quarter of 2017 due to reduced waste mining activities this year in order to provide sufficient ore for the WOL project.

Phase two construction of the WOL project began in January, with completion due in the fourth quarter. On the other hand, the cobalt production section of the plant was commissioned in March, leading to the production of 525 tonnes of contained cobalt in the three-month period.

For the quarter ended March 31, Katanga narrowed its net loss to US$77.9 million, from US$100.9 million. Total sales in the period was US$146.7 million, from a loss of US$2,000 a year ago, with total cost of sales at US$178.3 million.

In April, Katanga faced two separate legal challenges from Générale des Carrières et des Mines, or Gécamines SA, and Ventora Development Sasu, a company affiliated with Israeli billionaire Dan Gertler.

Gécamines began legal proceedings to dissolve Kamoto Copper Co. SARL, following the joint venture's failure to address a previously disclosed capital deficiency. The DRC state miner accused parent Glencore of "draining" money from the Kamoto joint venture.

In May, the Congolese Supreme Court ruled to suspend capital deficiency proceedings to dissolve the Kamoto joint venture.

Separately, Ventora served freezing orders against Mutanda Mining SARL and Kamoto, accusing both companies of failing to make required royalty payments. The Glencore subsidiaries contended they did not have to pay the Gertler-affiliated company the royalties due to Gertler's classifications as a specially designated national by the U.S. government in late 2017.

Katanga continues to assess the impact of both legal proceedings on its operations, with both cases posing a risk of materially and adversely impacting the Kamoto joint venture's future operations.