Vedanta's Zambia unit to mothball copper mine as demand wanes

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LUSAKA, Nov 26 (Reuters) - Zambia's Konkola Copper Mines (KCM), owned by Vedanta Resources (Other OTC: VDNRF - news) , said on Thursday it would mothball its loss making Nchanga underground mine from Nov. 27, a sign of the increasingly weak global demand for base metals.

Benchmark copper on the London Metal Exchange hit $4,443.50 a tonne this week, its lowest level in more than six years, and the outlook for prices remained poor given weakening Chinese demand for resources.

"KCM has been reviewing its operations and Nchanga underground mine was highlighted as a loss making asset which, if allowed to continue, would result into the business losing $30-$40 million over the next year," the company said in a statement.

"The decision has been made in order to protect the financial viability of the whole KCM business."

KCM said the mine's permanent employees would be deployed within the business, although around 2,500 contractors would lose their jobs.

KCM said it made the decision after consultations with labour unions and that it would evaluate the best way to bring the operations back into production when market conditions improve. (Writing by Olivia Kumwenda-Mtambo; Editing by Joe Brock)