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Freeport, Glencore cope with Congo power shortage

  • Freeport McMoRan (FCX) says power rationing in the Democratic Republic of Congo will not affect its operations in the short term but a reliable energy supply would be crucial for any future expansion plans.
  • The Democratic Republic of Congo, Africa’s biggest copper producer, has told miners it will institute an electricity rationing program and its state-owned power company will stop signing new contracts.
  • Glencore Xstrata’s (GLCNF, GLNCY) Mutanda and Katanga mining projects and FCX's Tenke Fungurume mine are Congo’s top copper producers; Katanga is scheduled to expand production to almost 300K metric tons by year-end, and Tenke plans to add a second sulfuric acid plant by 2016.
Comments (7)
  • minwyhe
    , contributor
    Comments (103) | Send Message
     
    Instead of decrying the lack of power why doesn't FCX become part of the solution. Here's another example of FCX using the resources of very poor nation like Indonesia and not stepping to make the situation better.
    7 Mar, 10:19 AM Reply Like
  • The Rebel
    , contributor
    Comments (949) | Send Message
     
    minwyhe-

     

    Your diatribes about FCX lack of ethics gets a bit boring. Did you lose your shirt on an FCX trade once? LOL
    8 Mar, 05:08 PM Reply Like
  • minwyhe
    , contributor
    Comments (103) | Send Message
     
    Why because they key on the issue,
    9 Mar, 10:08 AM Reply Like
  • dunce1239
    , contributor
    Comments (104) | Send Message
     
    This really sounds like an extortion attempt to get around the contract it has with the miners. Jacking up power rates by the state owned power company are effectively taxes. Electrical power is a big part of the cost of ore processing.
    7 Mar, 11:30 AM Reply Like
  • DeepseaDiver
    , contributor
    Comments (21) | Send Message
     
    Power shortages in developing nations is the major reason why I built a significant position in FCX. Last year, it was reported that India had trouble supplying consistent power to their Tier 2 cities where a lot of manufacturing was taking place. The manufacturers installed their own diesel driven power plants to cover the rolling brown-outs which was a solution even though it was not very cost effective. My thesis has always been that for any country to have a robust economy; an adequate power grid is required and that translates into a copper demand. I agree with the comment made by minwyhe. In 1995, I was in Nigeria training engineers and I’m so proud of these Nigerians who went on to do great things over the years as I watched their standard of living improve and their families grow as well. When you partner with a nation and take an interest in developing their human capital as well – it’s a total win-win. Bill Gates in his annual letter from the Bill & Melinda charitable foundation predicted that: “By 2035, there will be almost no poor countries”. Helping to build an infrastructure while developing a country’s human capital are ways to get there. Yes, copper prices are falling but this is a short term situation. As Jim Cramer would say, “It’s time to backup the truck and buy more stock.”
    9 Mar, 08:46 AM Reply Like
  • minwyhe
    , contributor
    Comments (103) | Send Message
     
    What proof do you have that FCX is improving the human capital? You are using 1 countries experience to judge what COULD happen in another. You trained engineers what happened to the workers digging the ore how much was their lot improved? Are they barely making ends meet or has their lives been improved like the engineers? Seeing what happens in our country I have strong doubts there is much improvement at the bottom. Let's get our minimum wage up to a livable one and then lets talk.
    10 Mar, 11:31 AM Reply Like
  • DeepseaDiver
    , contributor
    Comments (21) | Send Message
     
    Minwyhe, I have no proof that FCX is improving the human capital but all large corporations have a code of ethics on how they should operate in foreign countries which should state that they respect the country’s values and abide by their laws. They should also have an effective HRD (Human Resource & Development) department. My experience has been in the Oil & Gas sector and I chose Nigeria as an example because the poverty and human condition in 1995 was the worst I had seen and the impact I made in developing the Nigerians was the greatest and as I look back on my life, I know that I have made a difference. I also didn’t mention that I trained non-degreed operators who had little education but had no problem learning a particular skill set in running and maintaining oilfield toolstrings. Everyone was very happy with their job and pay as there were opportunities for advancement and higher pay based on performance and increasing one’s skill set. I grew up in a family of 10 and my father struggled to give us the basics by going to work as a janitor from 6pm till midnight after his regular job. My mother made sure that we got a good education and I was the first child to go to college, my two older brothers entered the Vietnam conflict and both still suffer with their disabilities today but things are manageable for them as they obtained their advanced education on the GI benefits. I give you this personal glimpse to show you how strongly I feel about education and training as a solution to improving one’s lot in life. As human beings we will all experience suffering but it doesn't mean that we have to be miserable. I believe that developing one’s God-given talents is a solution to many of our social issues. I hope that FCX can partner with Indonesia to help build those smelters; it has been my experience that corporations are more cost effective and efficient in bringing large projects to fruition than most governments. Thanks Minwyhe for your reply.
    12 Mar, 08:41 AM Reply Like
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