Nearly 300 jobs will go after Copper miner Metals X says it will immediately suspend operations at its Nifty Copper Mine in the eastern outback of Western Australia (near where Newcrest’s Telfer gold and copper mine is located and the recent copper, gold and silver strike by Rio Tinto).
Metals X said the decision to halt production following an operational review which was flagged to the market earlier this month.
Global copper prices have been weak for much of this year because of the tensions from the Donald Trump driven US-China trade war (China is the world’s biggest consumer of copper metal and concentrates).
The Comex price has lost 1% this year (gold and iron ore prices are up sharply by way of comparison) thanks to a 4% rise in the past three months. That obviously hasn’t been enough to save the Nifty mine from closure.
The miner said production at Nifty had “plateaued” in recent weeks, and the review had identified that it was unlikely to achieve planned production at an acceptable cost and within its previously expected time frame.
The suspension comes nearly two weeks after the company initiated a review and flagged weakness in production at the mine for the December quarter.
“The operation is not where it was expected to be at this stage of the Reset Plan and following the operational review, the increased uncertainty in the plan leaves us with no viable alternative,” Managing Director Damien Marantelli said.
Metals X acquired Nifty in 2016 through the takeover of Aditya Birla Minerals.
The company said that the decision to shut Nifty would allow it to focus on its Renison Tin Operations in Tasmania, in which it has a 50% stake through the Bluestone Mines Tasmania joint venture.
The company says it is in talks with the employees about placement and support.
Metals X said in yesterday’s statement that it “remains in a sound financial position with estimated cash at the end of November 2019 of approximately $45 million excluding cash-backed bonds of $11 million. The Company is currently carrying $35 million debt with Citibank and remains compliant with the associated covenants.”
Metals X shares fell 13.5% after the announcement but had recovered those losses to end at 11.5 cents. The news was baked into the share price.