By Mukosha Funga
Konkola Copper Mines has decided to downsize its operations owing to the new tax regime which took effect on January 1.
According to a brief issued to all KCM staff today, management stated that it had been left with no choice but to downsize operations at Nchanga Smelter Operations due to low availability of concentrates.
“Management wishes to advise employees and business partners that starting on 4th January, 2019, Banded Sand Stones (BSS) operations at Nchanga Underground Mine will be suspended due to low acid availability as a result of rationalized operations at the Nchanga Smelter. Nchanga Smelter Operations will be downsized due to low availability of concentrates. The management was left with no choice but to scale down operations under the circumstances as the introduction of 5% import duty on concentrates has made the smelting of imported concentrates commercially unviable. KCM needs to import concentrates in order to meet smelter capacity and blending requirements,” read the brief.
“The new import duty has an impact on every tonne of copper produced resulting from imported concentrates. The current margins are thin and completely eroded through this impact, resulting in high production costs and operational losses.”