Zambia's largest cobalt producer, Chambishi Metals will delay its ramp-up to full output until cobalt prices rise to $22 per pound from the current $18 per pound, the firm said on Wednesday.
Chambishi, which is owned by Enya Holdings of the United Kingdom, had forecast output at 3,400 tonnes of cobalt in 2009 from 2,500 tonnes in 2008 before it suspended operations, which were restarted this month.
Chief Executive Officer, Derek Webbstock said although suppliers in the Democratic Republic of Congo (DRC) had delivered cobalt concentrates, the processing plant would restrict operations to the leaching unit until prices ticked up.
"We will only restart the furnace where we can produce ferro-alloys from slag once the prices reach the previous levels of $22 per pound," Webbstock told Reuters.
"If I can get material of a higher grade then I can restart the furnace because the output depends on the quality of the material. We are presently not getting any raw materials for the furnace from the DRC," Webbstock said.
Operations at Chambishi were suspended last December and placed on care and maintenance due to losses the company suffered after metal prices fell and costs rose owing to the global economic slowdown.
Webbstock could not state the current output, saying he needed to reconcile the figures in the first week of December.
Webbstock said Chambishi would not use the local raw materials from the Nkana slag dump, 359 km north-west of Lusaka at the current price because the slag was of low grade.
"We are producing the current cobalt from the leaching circuit. It is cheaper for us because we are not using electricity. The furnace remains an opportunity for the future," Webbstock said.
Chambishi would start processing copper concentrates after China Nonferrous Metals Mining Corporation (CNMC) unit, Luanshya Copper Mines (LCM) restarted output, Webbstock said.
Chambishi had forecast B-grade copper output of 20,000 tonnes in 2009.
Chambishi was previously owned by LCM, a joint venture of Bein Stein Group Resources (BSGR) and International Mineral Resources (IMR).
Source: Reuters
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