Silvercorp Metals Inc. (TSX: SVM) (NYSE American: SVM) announced a temporary slowdown at its Ying and GC mining operations in China as it implements new nationwide mine safety requirements introduced by Chinese regulators. The measures follow a fatal coal mine accident in May, prompting stricter enforcement of the 'Six Major Safety Systems' across all mines. The company expects production to be reduced by 10% to 15% during the current quarter and by 40% to 50% at the Ying Mining District and about 50% at the GC mine during the July-September quarter while required upgrades are completed and approved.
To comply, Silvercorp has engaged five certified vendors to install the safety systems at non-compliant mining levels at an estimated cost of approximately $5.5 million, with completion expected in about 50 days. The company also plans to spend an additional $6 million on facility improvements and equipment upgrades, including replacing electrical cables with halogen-free flame-retardant cables. Production will resume in phases as individual mining levels receive regulatory approval.
The announcement is significant because it highlights the impact of regulatory changes on mining operations in China, a key jurisdiction for many global miners. The temporary slowdown could affect Silvercorp's near-term financial results, but the company emphasizes its long-term commitment to safety and compliance. The new requirements may also influence other mining companies operating in China to accelerate their own safety upgrades.
For more details, the full press release is available at https://ibn.fm/UyR0X. Investors can find the latest news and updates relating to SVM at https://ibn.fm/SVM.
