The Democratic Republic of Congo
has imposed a 48-hour lockdown in Haut-Katanga, a key copper-cobalt-producing
province, after two people tested positive for the coronavirus on a flight from
the national capital Kinshasa to Lubumbashi, the provincial capital.
The measure, effective Sunday, is
expected weigh heavily on copper output, said Indigo Ellis, head of Africa
Research at global risk consultancy Verisk Maplecroft.
“The greatest risk to copper output from DR Congo is the potential for smelter or logistics-related bottlenecks, preventing mines from shipping concentrates,” Ellis said.
Congo is Africa’s main copper producer and the world’s No. 1 miner of cobalt, a key component in electric car batteries.
Ivanhoe Mines and MMG Ltd are among
the mining companies with concessions in Haut-Katanga.
Neighbouring Lualaba province, home
to mines owned by Glencore and China Molybdenum, ordered all public markets to
close on Monday except those selling food and medicine.
“As the world economy grapples with
the impacts of COVID-19, it is becoming increasingly unlikely that DRC will
manage to qualify for the International Monetary Fund (IMF) programme in
April 2020, particularly in the face of falling copper demand,” Ellis noted.
She’s referring to a financial
assistance package agreed on last year, which would allow the IMF to resume
lending to Congo for the first time since 2012.
The loan scheme is however expected
to be a boon for mining, Ellis said, as it will improve transparency and
accountability, dictating that all licences must be published online.
Congo is Africa’s main copper
producer and the world’s No. 1 miner of cobalt, a key component in electric car
batteries. But it is one of the world’s least developed countries, due largely
to corruption and poor governance.
Shortage
The news come as copper concentrate
treatment charges (TCs) continue to decline as a result of supply disruptions
at key copper producers, such as Chile, Peru and now the DRC.
According to SMM Metal Price’s estimates, TCs for imported copper concentrate spot trade in China came in at $68.35 per tonne last Friday, down $3.12/tonne from a one-year peak of $71.47/tonne the prior week.
Fears of supply shortages have stemmed from announcements last week by a several Chilean and Peruvian copper producers that they will reduce or suspend operations as their respective governments declare a state of emergency aimed at containing the spread of COVID-19.
Projects impacted include Anglo
American’s Los Bronces and Quellaveco as well as MMG’s Las Bambas and
Freeport-McMoRan’s Cerro Verde.
Chile’s state miner Codelco, the world’s No.1 copper producer, has also scaled down operations. On Monday, the company sent a letter to all its staff noting that the drop in copper prices has put some of its projects “at risk.”
With files from Reuters.