Message Lun 31 Oct 2016 17:35

Chinese NFCA in $25m loss

CHINESE owned Non-Ferrous Africa Mining Corporation (NFCA) has made losses amounting to US$25 million this year due to plummeting copper prices and costly power tariffs in Zambia, the company has disclosed.

NFCA chief executive officer Jinjun Zhang told mines minister Christopher Yaluma, who visited the mine in Chambishi on Thursday, that it was estimated the losses this year would increase to US$32 million.

"With drastic fall in copper prices and increased power tariffs, our company has made a loss of 25 million dollars in the first nine months of this year. As for last year, our loss came to 45 million dollars. According to our financial department’s estimation, our losses for this year will increase to US$32 million. Although we have been working very hard, we cannot change the situation of the market," Jinjun said.

He said the company had in the first three quarters of this year processed a million tonnes of copper ore and produced 20,000 tonnes of copper metal, completing 74 per cent and 79 per cent of annual production plan respectively.

Jinjun stated that a continued decline in copper prices at the London Metal Exchange (LME) had been terrible for mining with latest prices in the last nine months standing at US$4,724 per tonne compared to US$5,707 per tonne in the same period last year.

"Faced with the low copper price, NFCA has strived to improve ore grade and recovery rates by effective management and technology innovation. Our cost of production in this year has seen remarkable reduction. For the first three quarters of this year, our breakeven price for production is US$6,150 dollars per tonne. Compared with the LME copper price that we have mentioned, for every tonne that we produce, we make a loss of 1,426 dollars," Jinjun said.

He said despite all the difficulties, NFCA had taken Sino-Zambia Cooperation into consideration and had neither laid off any employee nor suspended operations.

Jinjun said NFCA had even expanded operations through the South East Ore Body project.

"For the first three quarters of this year, the company has received a loan amounting to US$130 million from its parent company, China Non-Ferrous Metals Corporation, and the long term loan balance had reached US$517 million, all of which came from, or guaranteed by its parent company. All of these funds have been for preparation of the SEOB project. Up to the end of last year, the SEOB resources are estimated to be 1.48 million tonnes with the grade of 1.87 per cent," said Jinjun.

And Yaluma said the government was extremely concerned about the losses recorded by the mine due to the volatility in the market.

He said the government was however elated that despite challenges in metal prices at the international market and the electricity problem the country was facing, NFCA had no intentions of downsizing labour.

“Despite all these challenges, you managed to drop production cost, which is quite commendable. We know NFCA has shown serious commitment to supporting the economy through investment in capital projects such as the SEOB. We will go with you an extra mile as you venture in mineral development through SEOB project," said Yaluma.