Now export duty dispute halts Katanga’s copper exports

According to Mining News Pro -In its third-quarter results announcement, TSX-listed Katanga said that the DRC`s customs authority had temporarily blocked its 75%-owned subsidiary Kamoto Copper Company (KCC) from importing or exporting any material or production.

It explained that the dispute arose as a result of the overstatement of copper cathode production in December 2014. The production was provisionally invoiced at $43-million in December 2014, but this was eliminated in the restated financial statements for the years ended December 2015 and 2016.

The copper cathode production at issue was never produced and not sold, as such KCC does not believe that any export duties were owed on the overstated copper, Katanga said.

The suspension of KCC imports and exports comes as the company on November 6 announced that sales from the Kamoto mine were suspended after detecting levels of uranium in supplies above those allowed for export. The company plans to stockpile the cobalt supplies until the middle of next year, while it is building a special plant to remove radioactivity.

Meanwhile, Katanga reported an increase in copper and cobalt revenue in the third quarter. Copper revenue increased to $246.3-million, from $204.4-million in the second quarter, while cobalt revenue increased to $181.83-million from $141.14-million in the previous quarter.

Year-to-date copper revenue increased to $597.15-million and cobalt revenue to $322.97-million, from nil a year earlier, reflecting an increase in sales of copper cathode and cobalt contained in hydroxide, owing to the resumption of production in December 2017, following the completion of Phase 1 of the whole ore leach project and the ongoing ramp-up of production in 2018.

Concentrate revenue decreased to $0.3-million in the first nine months of 2018, from $17.8-million in the prior-year period.

Total revenue increased to $428.12-million in the third quarter, from $345.53-million in the second quarter and year-to-date revenue amounted to $920.39-million, from $17.60-million in the first nine months of 2017.

Katanga sold 34 596 t of copper cathode and 3 737 t of cobalt contained in hydroxide, up from 30 825 t and 2 176 t, respectively, in the second quarter.

The miner warned that, unless KCC was permitted to resume imports and exports in the near future, the suspension would negatively impact on its production and revenue.