Forrest Group Sells CMSK Mining Stakes to Congo’s Gecamines
Stock Chart for Zijin Mining Group Co Ltd (2899)
Gecamines, Democratic Republic of Congo’s state-owned copper miner, bought Entreprise Generale Malta Forrest’s 60 percent stake in the CMSK copper and cobalt project, the two companies said in a joint e-mailed statement.
The sale gives Gecamines full control of CMSK and will resolve an arbitration dispute over the project at the International Chamber of Commerce, Henry de Harenne, spokesman for EGMF’s parent company, George Forrest International SA, said. He declined to give the sale price.
“It’s a good price for us and for Gecamines,” de Harenne said by phone from Brussels. EGMF will use the money to invest in its other businesses in Congo, including energy, food, and construction, he said.
Lubumbashi-based EGMF filed charges in August 2011 against Gecamines at the Paris-based ICC’s International Arbitration Court, claiming Gecamines was trying to “illegally appropriate” its portion of CMSK. Gecamines claimed it had the right to purchase the stake after mining magnate George Forrest offered to buy it from EGMF, a company owned by his family. EGMF said it never intended to sell the shares.
Ahmed Kalej Nkand, the chief executive officer of Gecamines, said he was pleased with the agreement, according to the statement.
“Our objective is to improve Gecamines and to convert it into a leading independent mining operator,” he said. “CMSK contributes to this.”
Gecamines, which sits on the world’s biggest deposits of cobalt, is trying to increase production after decades of dictatorship and war in Congo left its infrastructure destroyed and cash reserves depleted. The company expects to produce about 35,000 metric tons of copper this year, Chairman Albert Yuma said in July, compared with 476,000 tons in 1986. Gecamines wants to increase output to 100,000 tons by 2015, Yuma said.
CMSK produced more than 40,000 tons of copper-cobalt concentrate last year, according to Katanga provincial mines ministry statistics. The project can produce 4,000 tons of cobalt and 12,000 tons of copper annually, according to the George Forrest International website.
The acquisition marks the second time this month that Gecamines has bought out a partner to resolve a dispute over an attempted share sale to a third party. On Sept. 10, Gecamines announced it would purchase partner Copperbelt Minerals Ltd.’s stakes in two copper concessions. The deal settled a dispute between the companies over a 2010 bid by China’s Zijin Mining Group Co. and the China-Africa Development Fund for a unit of Copperbelt.
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