New Tsumeb Copper smelter owners jet in - by Desie Heita
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WINDHOEK â€" Canadians who have bought the Namibian Tsumeb copper smelter have arrived in the country, bringing along a mixture of uncertainty, good news and news that is not so good.
Canadian Dundee Precious Metals acquired Weatherly Namibia's Tsumeb Custom Smelter in a deal worth US$55 million (about N$400 million at current exchange rates), a deal that, in theory, gives Weatherly a new lease to life in the form of being able to fund the re-opening of the copper mines.
However, selling the copper smelter brings about uncertainty whether Weatherly does intend on staying longer in Namibia or it signifies the point at which the company starts pulling out of the country.
The copper smelter has been Weatherly Namibia's most profitable business unit, and not the mining activities. The copper prices have indeed bounced back to levels where production is viable, but Weatherly did rake up huge debt loans and other credit facilities when managing the copper mines at a time when international copper prices were profitable.
Dundee Precious Metals settled some of these debts as part of the Tsumeb Copper Smelter deal.
Nevertheless, Chief Executive Officer for Weatherly International, Rod Webster, quelled the fears saying although the smelter was the most lucrative business unit, its sale to Dundee Precious Metals "gave us sufficient cash [to continue with mining]" and that Weatherly's "focus has always been on mining".
"There is no thought of us leaving town," Webster reassured at a joint press conference with Dundee Precious Metal in Windhoek on Tuesday.
Yet the bad news is that when the copper mines reopen later this year, Weatherly Namibia will employ a smaller number of miners compared to before. Otjihase copper mine, for instance, will employ about 300 miners instead of the more than 500 people employed before the closure of the mine in 2008.
The reason, says Webster, is that the new management wants "the most flexible blend of workforce" that combines permanent employees and contractors. "We are going to be extremely flexible and clever in what we do," said Webster.
Kombat and Tsumeb West mines have been placed on the market because they are not viable for Weatherly and will be up for grabs by those who think they can make them viable.
Dundee Precious Metals' Director for Commercial Affairs Jeremy Cooper says they intend doubling production output at the copper smelter to 240 000 tonnes.
"This would allow the smelter to take in more and reduce input costs," says Cooper, adding that the smelter is a "dominant employer in Tsumeb".
Namibian copper mines were placed under care and maintenance in December 2008 when the price of copper hit an all time low of about US$3 000 per tonne due to the global economic crisis.
International copper prices have since gone up, hovering above US$6 000 per tonne, a level where production is sustainable.
Webster says this time Weatherly would put in place an optimum package to operate the mines, and is currently in discussions with various investors for joint ownership in the mine. In effect, Weatherly want to scrap together US$10 million to use in the operations of the mine. Discussions are currently taking place with Mineworkers Union of Namibia's commercial arm, NAM-MIC, about affording equity participation to Namibian workers, but the discussions are at an early stage.
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Canadian Dundee Precious Metals acquired Weatherly Namibia's Tsumeb Custom Smelter in a deal worth US$55 million (about N$400 million at current exchange rates), a deal that, in theory, gives Weatherly a new lease to life in the form of being able to fund the re-opening of the copper mines.
However, selling the copper smelter brings about uncertainty whether Weatherly does intend on staying longer in Namibia or it signifies the point at which the company starts pulling out of the country.
The copper smelter has been Weatherly Namibia's most profitable business unit, and not the mining activities. The copper prices have indeed bounced back to levels where production is viable, but Weatherly did rake up huge debt loans and other credit facilities when managing the copper mines at a time when international copper prices were profitable.
Dundee Precious Metals settled some of these debts as part of the Tsumeb Copper Smelter deal.
Nevertheless, Chief Executive Officer for Weatherly International, Rod Webster, quelled the fears saying although the smelter was the most lucrative business unit, its sale to Dundee Precious Metals "gave us sufficient cash [to continue with mining]" and that Weatherly's "focus has always been on mining".
"There is no thought of us leaving town," Webster reassured at a joint press conference with Dundee Precious Metal in Windhoek on Tuesday.
Yet the bad news is that when the copper mines reopen later this year, Weatherly Namibia will employ a smaller number of miners compared to before. Otjihase copper mine, for instance, will employ about 300 miners instead of the more than 500 people employed before the closure of the mine in 2008.
The reason, says Webster, is that the new management wants "the most flexible blend of workforce" that combines permanent employees and contractors. "We are going to be extremely flexible and clever in what we do," said Webster.
Kombat and Tsumeb West mines have been placed on the market because they are not viable for Weatherly and will be up for grabs by those who think they can make them viable.
Dundee Precious Metals' Director for Commercial Affairs Jeremy Cooper says they intend doubling production output at the copper smelter to 240 000 tonnes.
"This would allow the smelter to take in more and reduce input costs," says Cooper, adding that the smelter is a "dominant employer in Tsumeb".
Namibian copper mines were placed under care and maintenance in December 2008 when the price of copper hit an all time low of about US$3 000 per tonne due to the global economic crisis.
International copper prices have since gone up, hovering above US$6 000 per tonne, a level where production is sustainable.
Webster says this time Weatherly would put in place an optimum package to operate the mines, and is currently in discussions with various investors for joint ownership in the mine. In effect, Weatherly want to scrap together US$10 million to use in the operations of the mine. Discussions are currently taking place with Mineworkers Union of Namibia's commercial arm, NAM-MIC, about affording equity participation to Namibian workers, but the discussions are at an early stage.
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