Jubilee Metals’ Zambian copper venture reported a slip in output after struggling to recover from power outages earlier this year.
The Zambian operation’s weaker performance in the 12 months to end-June may deal a blow to Jubilee’s confidence in its mooted restructuring plans, with the miner eyeing a shift out of SA in the coming months.
The group has invested significantly in its Zambian expansion in recent years, hoping to capitalise on copper’s strong demand outlook while easing its exposure to the more volatile chrome and platinum group metals (PGM), particularly given the limited growth opportunities available to its ageing SA assets.
Through growing investment in its Zambian operations, Jubilee increased its annual copper output from 2,269 tonnes in the year to end-June 2022 to 3,422 tonnes in the 2024 financial year.
In the past year, however, Jubilee’s ambitions have been set back by power and infrastructure challenges, including electricity outages, which saw the miner put its Roan concentrator on care and maintenance for a prolonged period earlier this year.
As a result, the group produced only 757 tonnes of copper in the second half, taking its annual output to 2,211 tonnes, down 35.4% from the previous financial year.
In the face of weaker results, Jubilee doubled down on its Zambian ambitions, upping its exploration spending to expand its copper resource base. The company is also drilling to test the potential of combining the component pits of its Munkoyo mine to form one, large-scale open-pit operation.
“The energy related challenges we faced earlier this year, though difficult, have helped us emerge with a clearer, more focused strategy backed by secure power supply and higher value material supply agreements,” said Jubilee CEO Leon Coetzer.
“This operational focus, prioritising run-of-mine and previously mined materials, closely resembles the successful evolution of our SA chrome and PGM operations albeit with an integrated portfolio of our own feedstock supply,” he said.
According to recent announcements, the company is mulling over a $90m (R1.6bn) offer from an undisclosed buyer to take over its chrome PGM operations in SA.
While the buyer has still not been identified, Jubilee said in its latest trading statement that “definitive agreements” for the disposal were now “near final form”, with a circular containing the full details set to be released next week.
Shares in Jubilee slumped about 7% in lunchtime trade, extending the group’s year-to-date losses to 21.6%.
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