Desie Heita
28 October 2008
Windhoek — Weatherly Mining is cutting costs as international copper prices plummet to US$3800 per tonne from well above US$6000 per tonne.
As part of cost-cutting measures, Weatherly Mining is reviewing most of its contracts, renegotiating and terminating those it believes it can replace with own employees.
Termination of some of the contracts led to the rumours that the mine is undergoing serious financial difficulties, something that the London-based Chief Executive Officer for Weatherly, Rod Webster, has denied.
Webster and the Managing Director of Namibia Custom Smelter at Tsumeb, Hans Nolte, maintained that Weatherly is financially sound.
They are not contemplating to pack up and go. Namibia Custom Smelter is a subsidiary of Weatherly.
"We have US$80 million worth of assets without any debt," said Webster, adding that somehow, the mining company has not been able to shake off the bad legacy and reputation left behind by Ongopolo Mining.
"We have never been able to shake off Ongopolo's reputation, which is totally a different beast from Weatherly," said Webster.
Weatherly has already terminated the contract with the company that was operating at Tschundi Mine and has moved some of its own employees from Tsumeb West mine to mine at Tschundi Mine.
Nolte said some of the contractors did not fulfil their contractual obligations to train Namibians, perhaps with the intention of hanging on to the contracts for as long as possible.
"They bring in underground operators from outside the country instead of training local people, especially on mining machines that are not complicated to operate," said Nolte.
Weatherly is now training the people at its own cost.
Weatherly has an annual copper production of around 15000 tonnes, while the smelter processes 20000 tonnes of blister copper. Weatherly sources some of the copper blister from Bulgaria and Peru.
In the meantime, Webster said the company has hedges in place, fixed at US$5000 per tonne of copper, protecting the mine from the price drop.
The hedging is in place until December 2008.
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