July 16, 2020 / 5:51 PM / 24 days ago

UPDATE 2-Zambia rejects Glencore copper mine's suspension plan

* Government scuppers Glencore plan to suspend Zambia mine

* Mopani Copper Mines to appeal against ministry decision

* Mines to continue operations pending appeal

* Government says it is open to dialogue (Adds government response)

By Chris Mfula

LUSAKA, July 16 (Reuters) - Glencore’s Zambia subsidiary Mopani Copper Mines on Thursday said the country’s mines ministry rejected its proposal to suspend operations because of low copper prices and disruptions caused by the coronavirus crisis.

Mopani said it would appeal against the decision and will continue mining operations pending the outcome of the appeal process.

Operations were halted at its mines at the start of April, with Mopani citing the COVID-19 pandemic and other problems, but mining resumed a month later after the decision sparked a backlash from the Zambian government.

“Mopani remains of the belief that the only way to protect the company’s value and preserve the option to deliver its growth projects when conditions further improve is to transition the operations to C&M (care and maintenance),” it said on Thursday.

Zambia’s mines minister, Richard Musukwa, said the government had made it clear from the beginning that it wants Mopani to continue and said he was happy Mopani had “responded favourably” to his call not to place the mine under care and maintenance.

Musukwa said that Mopani has cut the number of expatriates working at the mine from 94 to 49 and the company will address concerns over what he described as its high cost of production.

“We are open to dialogue because we want what’s best for the people of Zambia and Mopani is strategic to economic trajectory,” he said.

Mopani Copper Mines, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s mining investment arm ZCCM-IH. (Reporting by Chris Mfula Writing by Helen Reid Editing by Elaine Hardcastle and David Goodman)

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