Gecamines of Congo Plans to Raise $1 Billion for Copper Plant
Gecamines, Democratic Republic of Congo’s state-owned mining company, said it’s seeking as much as $1 billion to build a copper plant after taking ownership of two mining sites that contain 5 million metric tons of the metal.
The company, based in Lubumbashi, completed its takeover of the Deziwa and Ecaille C copper-cobalt projects on Jan. 11 after buying out Copperbelt Minerals Ltd.’s indirect 68 percent stakes in the projects, according to a statement on its website. The sites may eventually produce 200,000 tons of copper a year combined, making it one of the biggest producers in the country, Gecamines said.
“The construction of a first phase of 100,000 tons could cost between $800 million and $1 billion,” Gecamines Chairman Albert Yuma said in an e-mailed response to questions yesterday. The company plans to develop the project alone and is already in discussion with banks for financing, offering the reserves as a guarantee, he said.
Gecamines is trying to increase production after decades of dictatorship and war left its infrastructure destroyed and cash reserves depleted. The company produced about 18,500 tons of copper in the 11 months through November, according to data from Congo’s Central Bank. That compares with production of almost 500,000 tons at its peak in the 1980s. The company was targeting 35,000 metric tons of copper production for 2012, Yuma said in July.
Congo is the world’s largest source of cobalt and produces about 3 percent of the world’s copper.
Gecamines is also trying to secure about $650 million for the development of a 500-megawatt coal-fired power plant in the southeastern Katanga province and about $1 billion for a corporate reorganization. It’s also been working to restructure about $1.6 billion of debt since 2011.
The terms of a three-year International Monetary Fund loan agreement signed in 2009 with Congo forbade the state-owned miner from taking on new external debt at non-concessional rates. The IMF prematurely canceled the loan program in December after the country failed to disclose the full details of one of Gecamines’ asset sales to Israeli billionaire Dan Gertler.
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