The Democratic Republic of Congo’s largest copper producer has said it is operating at a loss in the latest worrying sign both for its Chinese owner and the African nation’s struggling mining sector.
Tenke Fungurume Mining, 80 per cent owned by China Molybdenum, revealed it was in the “deficit zone” in a letter to employees. While reassuring them it would seek to preserve jobs, it warned that low prices and higher production costs were “squeezing the business profitability” of all miners in the country.
Miners in the DRC are struggling to cope with the twin effects of low prices and a new mining code that increased taxes last year. TFM’s letter, seen by the Financial Times, follows Swiss commodity giant Glencore’s announcement this month that it will shut production at its mine in the country, Mutanda, following the dramatic fall in cobalt prices.