Namibia’s sole copper miner Weatherly Mining Namibia has said it will not re-open its five mothballed copper mines in 2009, despite a notable recovery in the international prices of copper.
London-listed Weatherly International Plc, which owns the Namibian copper assets , shut down operations last year, citing shrinking revenue as copper prices bottomed out due to the global e conomic turmoil.
More than 620 workers employed by the copper mine were thrown into the streets d ue to the closure of the mines.
Copper prices, which nearly topped US$9,000 per tonne in 2007, fell to around US $3,100 a tonne late last year as demand for commodities shrunk amid a devastating slowdown in the global econo my.
However, the prices of copper, the bellwether of base metals, have clawed back a nd were this week hovering around US$5,000.
Copper, which is used extensively in power and construction, rose to around US$5 , 000 a tonne this week on the London Metal Exchange.
The Namibian miner has however said that it will not re-start its operations thi s year.
Hans Nolte, Weatherly Mining Namibia MD, said Friday that the company did not ha ve any hopes of re-opening this year.
In fact, Weatherly Mining has been auctioning most of its underground mining equ ipment, in a chilling indication that it might not restart operations.
Nolte painted a bleaker outlook for the future of the country’s sole copper mine r, which he said was now carrying out feasibility studies to determine the most effective low cost way of mining.
Among the options being considered are the possibility of abandoning underground mining in favour of open pit mining, Nolte said, adding that the company was also hunting for fresh capital either through borrow ing or inviting new investors to take up shareholdings in return for equity.
Nolte said the strengthening of the Namibian currency against major currencies h ad compounded the company’s woes and made it capital intensive for exporters.
The Namibian dollar, which is pegged one-to-one to the South African rand, has s trengthened from more than N$10 against the US$ and is now hovering around N$8 against the US currency.
Nolte also defended the company’s move to auction its mining equipment, saying t hat ‘we cannot just allow it to rot unutilized.’