Global Wrap: COVID-19

IN Global Wrap: First Quantum suspends large copper operation after contractor dies of virus; Franco-Nevada pulls guidance; Antofagasta suspends expansion; Vale extends care and maintenance; and New Gold restarts.
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Staff reporter

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First Quantum Minerals has suspended its massive Cobre Panama copper operation due to a Panamanian government directive.

It follows the death of a contractor from COVID-19, while 11 others are reported to be infected.

First Quantum expects temporary care and maintenance to cost US$4-6 million per week, assuming the suspension of labour contracts and hard turn down of other variable and fixed costs.

Canadian royalty major Franco-Nevada Corporation has suspended its 2020 guidance, saying production at 11 of its 56 producing royalty assets was either curtailed or suspended in response to COVID-19.

That includes Cobre Panama.

The company said its assets were top-line royalties and streams which did not bear carrying costs, making the impact to its curtailed production outlook essentially limited to "a deferral of revenue".

Antofagasta has suspended the $1.3 billion expansion project underway at its flagship, majority-owned Los Pelambres copper operation in Chile for up to 120 days due to the global COVID-19 pandemic.

"This is a temporary suspension that has been taken as it is not possible to continue with the construction of the project as originally planned and is only for the duration of the emergency, as we hope to resume work as soon as possible," Antofagasta Minerals vice president of projects Francisco Walther said.

Los Pelambres produced 363,400 tonnes of Antofagasta's record 770,000t copper output in 2019.

The expansion, which was 31% complete at the end of 2019, is expected to add an average 60,000t per annum to production over the first 15 years of operation. 

In an update last week, CEO Iván Arriagada said Antofagasta's mines were operating with about half the usual workforce but the impact on production to date had been limited.

The company said it would review full-year guidance in its first quarter production report slated for release on April 22.

Vale said it would extend the care and maintenance period at its Voisey's Bay mine in Canada by up to three months while minotiring the COVID-19 outbreak.

The company announced a four-week suspension on March 16 to protect indigenous communities.

The Long Harbour processing plant will continue to operate, drawing down on stockpiled concentrates to produce nickel and cobalt at forecast levels. Copper concentrate production at the site will be reduced due to the mine stoppage, with an impact of up to 6000 tonnes in the current half.

Finally, New Gold has reported the restart of its Rainy River gold mine in Canada, which was suspended for 14 days due to COVID-19.

Local workforce will be used for ramp-up, with rostered workers to be reintroduced gradually.

The company said it would continue to work with local and indigenous communities to implement measures to reduce the risk of the spread of the virus.

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