Eurasian Resources Group is considering selling Mozambican assets and reviewing mining permits in the DRC to decrease costs. CEO Nicolas Treand stated that low cobalt prices are impacting operations, prompting this restructuring. The company is also reassessing projects in South Africa and Zimbabwe as part of this strategy.
Eurasian Resources Group, backed by Kazakhstan, is contemplating asset sales in Mozambique and a reassessment of its mining licenses in the Democratic Republic of Congo (DRC) to cut costs, as revealed by CEO Nicolas Treand during an interview at the Mining Indaba in Cape Town. The initiative is a response to declining cobalt and chrome market prices, leading the company to refocus its investments in Africa.
Treand highlighted the adverse market conditions for cobalt, anticipating continued low prices for the next two to three years. He emphasized the need to streamline operations in the DRC, citing high operational costs tied to maintaining numerous mining licenses. Furthermore, he expressed no concern over the ongoing conflict in eastern Congo affecting the company’s activities due to geographical distance.
The group is also evaluating its mining projects in South Africa and Zimbabwe, aiming for a comprehensive restructuring across its African operations. The current market instability requires a strategic realignment to enhance operational efficiency and financial resilience.
In the context of the global mining sector, the Eurasian Resources Group is facing challenging economic conditions dictated by the supply and demand dynamics of cobalt. A surge in cobalt production has led to a surplus, significantly deflating prices, and pressuring producers to reassess their financial strategies, particularly in high-cost regions like the DRC. This situation compels firms to optimize their asset portfolios and project viability, especially in resource-rich but economically volatile areas such as Mozambique and parts of Southern Africa.
Eurasian Resources Group is actively seeking to enhance efficiency by selling assets in Mozambique and reviewing operations in regions like the DRC, South Africa, and Zimbabwe. The low market prices resulting from a global cobalt oversupply are influencing these strategic decisions, compelling the company to focus on cost reduction and effective resource management over the next few years, whilst attempting to minimize risk amidst geopolitical tensions in the region.
Original Source: www.mining.com
