The chief executive of ailing mining company Glencore said today rival companies should also be closing their loss-making mines to stop flooding the copper market.
Ivan Glasenberg said: “If you're not making money I believe you should take production out and reduce supply. Don't create oversupply in the market for no reason.”
Speaking at a Financial Times Africa summit in London, Glasenberg said Glencore had temporarily suspended two copper projects in Africa when copper prices fell towards $5,000 a tonne, and other companies should be prepared to do the same. He said he intended to resume operations in 2016 “and make them lower-cost.”
The governments of the Democratic Republic of Congo and Zambia supported the decision to pause mine construction so long as the company tried to help staff affected by the closures, Glasenberg continued.
“They told me: 'We don't want you producing copper from our country if you're not making money' as they won't get revenues unless we're making profits.”
Copper prices fell to a six-year low in August, but the Glencore chief seemed optimistic for the future, saying “demand is still there, the market should tighten,” especially if other mining companies pause production to help rally prices.
He said hedge funds were “playing the commodity cycle,” and betting against copper prices to make a point about China's economy, “but ultimately the fundamentals will play out.”
Glasenberg made no comment on Glencore's recent stock market crash, which saw prices fall 30 per cent at the beginning of last week.
This morning shares in Hong Kong surged as much as 72 per cent, and were trading up 10.53 per cent in London at pixel time.