(Adds quote, context, detail on upgrades)
KINSHASA, Sept 11 (Reuters) - Congolese miner Kamoto Copper
Company (KCC), controlled by Glencore GLEN.L , said on Friday
it was suspending production of copper and cobalt but would
press ahead with a planned $880 million modernisation project to
cut costs.
KCC said in a statement it would maintain at least 80
percent of its existing workforce during the shutdown, which was
announced this week in Glencore's results.
"The company has analysed numerous options but faces no
viable alternative in light of the challenging environment for
commodities," the statement said.
It added that KCC would follow through on an existing
investment in refurbishments to power plants at the Inga
hydroelectric dam in southwestern Congo and transmission lines
to the copper-mining southeast of the country.
Glencore estimates that the upgrades will bring down
production costs from more than $2.50 per pound to about $1.65
per pound.
The announcement followed a meeting between a Glencore
delegation and government representatives on Thursday in the
capital Kinshasa. In it statement, KCC said it would take into
account the issues raised by the government without elaborating.
Congo, Africa's biggest copper producer, mined more than 1
million tonnes of the metal for the first time ever in 2014. The
country's chamber of mines said last month that it expected
production to dip slightly in 2015 due to chronic power
shortages.
The value of Congo's copper exports, which represents more
than half the value of its total exports, fell by 25.8 percent
in the first half of 2015 compared to the same period last year
as prices fell on the back of fears of slowing demand in China,
the world's top industrial metals consumer. ID:nL5N1163HL
The KCC joint-venture is controlled by the Swiss mining and
trading company, while Democratic Republic of Congo's state
mining company Gecamines and Israeli billionaire Dan Gertler's
Fleurette Group both hold minority stakes.