Having climbed sharply after Russia invades Ukraine, copper prices have been slipping and are currently estimated to have fallen about 21% since the beginning of the year.
Khoemacau Chief Financial Officer Jaco Maritz told the media on Monday that the company is currently selling its output at $8,300 per tonne, acknowledging that prices had been declining.
Copper started the year at around $9,800 a tonne and went on to trade above $10,400 a tonne in early March over worries that the war in Ukraine would hit supply.
However, growing fears of a recession in the developed world have triggered a slow down in copper prices, a metal associated with construction and infrastructural development.
"Commodities are volatile and we have seen copper prices drop drastically,” Maritz said. “However, our priority is to focus on ramping up production to full capacity. “We will be doing this whilst containing costs and we are working on an operational plan.”
In 2015, copper price weaknesses sank Boseto Mine, which was located adjacent to Khoemacau on the Kalahari Copperbelt. The older mine had high operating costs, largely associated with the use of emergency diesel power.
Khoemacau, which bought, revamped, and is utilising the Boseto processor, says it remains on track for full output later this year.
The Toteng mine is currently producing about 10,000 tonnes of copper and silver concentrate each month. Khoemacau has the capacity to produce 155,000 to 165,000 tonnes of high-grade copper and silver concentrate a year, containing approximately 60,000 to 65,000 tonnes of payable copper and 1.8 to two million ounces of payable silver.
"We sell our copper to China and Serbia,” Maritz said. “It was a great market until three months back when the copper prices started declining, as demand went down.”
For his part, Khoemacau CEO Johan Ferreira said processing capacity has been increased from 3.65 million tonnes per annum to over eight million tonnes per annum, through the construction of a new concentrator at Zone 5, adding to Boseto’s operations.
Khoemacau produced its first copper-silver concentrate in July last year and in February, officials said production rates were at about 40% of the nameplate capacity of 65,000 tonnes and two million ounces of copper concentrate per annum.
