Zambia's Luanshya Copper Mines (LCM) will delay to June a resumption in its operations after some creditors refused to accept only half of the money they are owed by the mine owners, a government minister said on Friday.
LCM had been scheduled to restart production in May at its Chambishi Metals Plc, Zambia's largest cobalt producer, but this and a resumption at its Baluba copper unit have been put back to June, Mines and Minerals Development Minister Maxwell Mwale said.
LCM owes various creditors a total of $100 million and 86 percent of the creditors had accepted a plan for them to receive half the amounts they were owed, Mwale said. The rest of the creditors wanted the full amounts.
The credit issue will now be resolved by Zambia's high court, after LCM management files a scheme to determine the details and duration of the debt repayment.
Now the scheme will proceed to the (high) court as required by law, Mwale told Reuters.
LCM halted operations at Chambishi and Baluba in December, citing operating difficulties due to the global financial crisis, which has seen copper prices fall.
Mwale said LCM would continue to manage the two units under care and maintenance, while the government sought new investors to operate LCM.
We hope to complete the process of selecting the new investor by June, we can't keep this issue (unresolved) for too long, he said.
Mwale said the government had continued to hold talks with China's NFC Africa and other investors interested in taking over the assets of LCM, which include the Mulyashi copper project, where LCM had planned to invest $354 million to produce up to 100,000 tonnes copper in the long term.
LCM, a joint venture of International Mineral Resources (IRM) and Bein Stein Group Resources (BSGR), retrenched almost 1,740 workers in January, after its owners said the units could no longer operate viably under current global metals prices.
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