ZURICH: Mining giant Glencore posted a sharp fall in first half profits Wednesday and confirmed the temporary closure at a major cobalt mine in the Democratic Republic of Congo.
The production halt at the Mutanda project in DRC's southern Katanga province came in response to the mine's "reduced economic viability," as prices for the battery metal fell, Glencore chief executive Ivan Glasenberg said in a statement.
Overall, Glencore's profits through the first half of 2019 were down 92 percent compared with the same period last year.
"Our performance in the first half reflected a challenging economic backdrop for our commodity mix," Glasenberg said.
Global trade tensions, notably tariff battles between the United States and China, have heightened concerns about manufacturing output.
But Glasenberg voiced confidence that "commodities fundamentals will move in (Glencore's) favour.
The temporary closing of the Mutanda mine is the latest setback to the company's substantial operations in DRC.
Glencore has had a series of dispute with DRC authorities, as well as issues with illegal mining, a long-standing phenomenon in a country where vast mineral wealth has largely not benefited the population.
The Mutanda mine fell victim to an overall decline in the cobalt market, where prices hit a three-year low last month.
The metal is an essential component of electric cars, and investors had pegged it as a key commodity to a possible green revolution in the auto industry.
Demand has not yet matched expectations, however.
Glasenberg said operations at Mutanda "will recommence once economic conditions sufficiently improve."
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