Closure of copper mines adds gloom to Nam mining outlook

MINEWORKERS Union of Namibia representatives are scheduled to meet with the management of Weatherly Mining Namibia today in an effort to save at least some of the more than 600 mining jobs that are on the line after Weatherly decided to close its last two copper mines in Namibia.

The board of the Weatherly mines’ London-based parent company, Weatherly International plc, announced on Thursday that it will suspend operations at the company’s two remaining active mines in Namibia, Otjihase east of Windhoek and Tschudi near Tsumeb, because of a large drop in the world copper price.
About 600 employees will be affected, the company announced.
‘We learned (of) that with dismay, because these people are going to face a bleak future,’ the General Secretary of the Mineworkers Union of Namibia (MUN), Bro Joseph Hengari, told The Namibian on Friday. He said the closure would be a major blow to the Namibian mining sector.
According to Hengari, 643 jobs at the two mines are in the balance.
Hengari said MUN representatives are scheduled to have a meeting with the Weatherly management today, and that they will first of all be looking at the possibility of saving at least some of the jobs at the two mines.
The prospects for achieving this did not look good on Friday, though.
Hans Nolte, the Managing Director of Weatherly Mining Namibia and Namibia Custom Smelters, which is also a subsidiary of Weatherly, said that all the jobs at the two mines are on the chopping block.
According to Nolte, some 410 people are employed at Otjihase, with around 180 employed at Tschudi, and a number of temporary workers also being used at the two mines.
Except for retaining perhaps five to 10 jobs at the two mines to see to the care and maintenance of the mines, the rest of the jobs are all set to go, Nolte said.
The meeting with the union today would be to discuss termination packages for the affected employees, Nolte said.
Mining operations at Otjihase and Tschudi will continue until about December 20, when the mines will be shut down and prepared for care and maintenance, he said.
Weatherly’s copper smelter at Tsumeb, which is operated by Namibia Custom Smelters, will continue to operate, Weatherly also announced on Thursday.
According to Nolte, some 250 people are employed at the smelter. There is no possibility that some of the workers at the two mines will be shifted to the smelter, Nolte also said.
The smelter is one of only four copper smelters currently operating in Africa.
With the smelter’s income derived primarily from processing fees, it is not affected by the volatile copper price and will continue to process ore sourced internationally, Weatherly stated with the announcement of the closure of the two mines.
The company also stated that with the Otjihase and Tschudi mines being placed on a ‘care and maintenance basis’, it will enable the company to restart mining should the copper price return to a competitive level.
The announcement that the last two active mines in the Weatherly stable would be shut down – the suspension of operations at the company’s smaller Tsumeb West and Matchless mines had been announced earlier – is bringing the fallout from the global economic slowdown, accompanied by falling commodity prices, home to Namibia in a tangible manner.
In a statement issued by the Chamber of Mines of Namibia on Friday, the Chamber cautioned that Namibia’s mining industry would be hit hard by the global financial crisis, a corresponding crash in mineral prices, and the worldwide economic slowdown and recession in the United States, Europe and Japan.
The copper industry has been particularly badly affected, with the copper price having fallen by close to 60 per cent over the past three months alone, the Chamber indicated.
‘Copper is often seen as a key gauge of real economic activity because of its vital role in the construction and electrical industries,’ the Chamber stated.
It pointed out that the copper price has crashed from around US$8 000 a ton about three months ago to US$3 470 a ton on November 21.
During July 2006, when Weatherly took over Ongopolo Mining and Processing, which was the owner of the Otjihase, Tschudi and other copper mines now owned by Weatherly, the copper price fluctuated between about US$7 300 and about US$8 200 a ton on the London Metal Exchange (LME).
By the end of last week, the LME copper price had fallen to about US$3 665 a ton, which appears to be well below Weatherly’s production cost for a ton of the metal.
In Weatherly’s last full-year annual financial report, the company stated that it had produced 5 726 tons of copper at its mines at Otjihase, Matchless, Kombat and Tsumeb West in the year to the end of June 2007 at an average cost of US$4 190 a ton. The company managed to sell its production at an average price of US$6 821 a ton during that financial year, it also stated.
‘The drastic fall in mineral prices goes to show yet again that mining is a highly risky, cyclical, capital intensive business with booms and busts dependant on a wide range of factors outside Namibia’s control,’ the Chamber of Mines commented in its statement on Friday.
It stated that, with investments for exploration having diminished in Namibia, planned mining extension projects either being cut back or shelved altogether.
Previous expectations of significant growth in mining jobs now replaced by prospects of job losses, with serious social consequences, it may be some time before the mining industry can return to the stage where it was earlier this year when exploration was booming and finance was relatively easy to come by.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.

The Namibian uses AI tools to assist with improved quality, accuracy and efficiency, while maintaining editorial oversight and journalistic integrity.