JOHANNESBURG (miningweekly.com) – TSX- and ASX-listed minerals company Anvil Mining has begun the process of suspending concentrate production, postponing underground development work, and initiating a care-and-maintenance programme at its 90%-owned Dikulushi copper mine, in the Democratic Republic of Congo (DRC).

This was as a result of the low copper price, the company said on Monday.

“The Dikulushi total cash cost a pound of copper is presently well above the current prices. Although copper grades from underground sources would be higher from January next year, and cost reduction measures, including curtailment of certain capital expenditures have been put in place recently, a copper price of about $1,40 a pound renders the Dikulushi mine uneconomic at present,” Anvil president and CEO Bill Turner stated.

Turner added that as a result, it was decided to place the Dikulushi mine on care-and-maintenance.

“This decision has not been an easy one to make and is regrettable for our Dikulushi employees, communities surrounding the mine, and our stakeholders, but we believe that this is the best option to preserve our cash resources until market conditions improve.”

The decision to put the mine on care–and-maintenance would deliver a savings of about $2-million a month, after costs associated with care-and-maintenance, which would include plant shutdown, a continuation of pumping of the underground workings, ongoing plant and equipment maintenance, and site security and community relations, were deducted.

As Anvil owned the plant, supporting facilities, and critical equipment at Dikulushi, the costs associated with the suspension of operations was largely confined to demobilisation of the underground mining contractor and staff redundancies. Also, the company stated that operations at Dikulushi could be readily restarted, the timing of which was primarily dependent on the mobilisation of required staff.

Anvil stated that it was now focusing on securing the additional funding required to complete the Kinsevere stage two solvent extraction-electrowinning development, and the commissioning of the first of the Kinsevere stage one electric-arc furnace, to design capacity by the end of the first quarter of 2009.

Both stage one and two were key elements of Anvil’s strategy for the next six to twelve months.

The company would also focus on the finalisation of the tentative agreements reached between State-owned mining company Gecamines and the DRC government, for the company’s mining properties in that country, maintaining a minimum cash balance to support Anvil’s activities, curtailing capital spending, and cutting general and administrative costs to the minimum necessary.

For an up-to-date list of companies that have announced cutbacks as a result of the financial crisis and commodity-price declines click here.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.