Imperial Metals (TSX:III) is suspending mining operations at its Mount Polley copper mine.
In a news release today, January 7, the company blamed recent low copper prices for the suspension. While mining operations will cease, the company said it will continue to mill "low grade stockpiles," which will keep at least some workers employed until May 2019. The mine employs roughly 370 workers.
Meanwhile, the financially battered company is in the process of a reorganization and the company has signaled that it may try to sell off some or all of its assets. Imperial Metals' share prices were up 13.71% January 7, following the announcement of the curtailment of Mount Polley's operations.
The long-term future for copper is bright, according to analysts, but in the short-term, China's slowing economy and trade war with the U.S. has seen the demand, and price, for copper drop in recent months, from $3.95 per pound in July 2018 to about $3.50 per pound by the end of December. China accounts for about 50% of the world's copper consumption.
In the third quarter of 2018, Imperial Metals' revenue fell 21%, from $90.2 million in the second quarter to $70.5 million in Q3.
At the end of November, Imperial Metals announced that two engineering companies that it had sued over the collapse of the Mount Polley tailings pond in 2014 had reached an out-of-court settlement. The company announced that the two companies, Knight Piesold and AMEC, had agreed to pay the company $108 million in an out-of-court settlement.
The money will give the company much-needed liquidity as it explores a range of restructuring options, which could include the sale of some assets, or outright sale or merger, the company said. The company also announced a management restructuring at its Red Chris mine.