(Minews) - Discovery Metals Ltd on Wednesday said it will suspend copper mining in Botswana within the next six months, citing a deteriorating world copper price.
Australia-listed Discovery said an internal review over the economic feasibility of its 15,000-tonnes-per-year Boseto copper operation in northwest Botswana pointed to a soft market outlook for copper, where the price of the metal has dropped by $1,000 per tonne, or 15 percent, since January.
The move to idle the mine comes as sector majors Rio Tinto and BHP Billiton continue to amass vast copper holdings in a push to capture a greater chunk of the $140 billion world market, putting pressure on smaller producers such as Discovery unable to compete on costs and shipping.
Separately and in joint ventures, Rio and BHP intend to mine millions of additional tonnes of copper, despite seeing an over supplied market for the next few years.
In June, Discovery reported its cash operating costs were averaging $2.86 per pound. Benchmark London Metal Exchange copper closed at $6,362 per tonne, or $2.88 a pound on Tuesday.
A worldwide copper supply surplus of 300,000 tonnes is forecast in 2015 by Australia's Bureau of Resource and Energy Economics, equivalent to half a year's output by South Korea.
Discovery shares tumbled by as much as 35 percent on Wednesday to just above 1 Australian cent.
