Low prices prompt Metallum to halt mining at Chile project
PERTH (miningweekly.com) – Copper developer Metallum has been forced to halt mining operations and stand down its production staff at the El Roble copper project, in Chile, as commodity prices continue to decline.
The ASX-listed junior on Tuesday said the decision to halt mining operations at El Roble was also taken in the face of a dramatic price decrease of the Enami tariff for delivered ore, as well as the anticipated removal of the copper price support mechanism by the Chilean government.
The Enami benchmark price for oxide copper has been reduced from $73.82 in June, to $49.66 by September. In addition, the realised value, as a percentage of contained metal, has also reduced from 51% in June to 37% in September, Metallum said.
Under the current Enami price structuring, mining at El Roble had become uneconomic, and had resulted in Metallum moving to put the mine into care and maintenance.
Metallum told shareholders that while a timeframe could not be provided on when the company would be able to restart operations, the miner was looking to source alternative processing options for the El Roble copper ore and was currently in negotiations with private copper ore processing plants within trucking distance of the mine.
Further, the company was negotiating the restructure of its option agreement over certain concessions at El Roble to better align its option payment commitments with possible production from the concessions.
The El Roble project comprises the San Sebastian, Viuda and Paraguay underground mines.
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