Sicomines, a joint venture between a group of Chinese companies and Democratic Republic of Congo’s Gecamines SA, will start production of copper in 2015 after it cut proven reserves by a third, a Congolese official said.
The venture, which is part of a $6 billion minerals-for-infrastructure deal between China and Congo, has discovered 6.8 million metric tons of proven copper reserves, according to Moise Ekanga, executive secretary of the Office for the Coordination and Monitoring of the Sino-Congolese Program. Sicomines said in 2009 it had found about 10 million tons of proven copper and 600,000 tons of cobalt reserves.
China and Congo “are exploiting this concession together in order to reimburse the financing for the infrastructure and mining projects,” Ekanga told reporters today in Congo’s capital, Kinshasa. “So if with the 6.8 million tons of proven reserves we can pay it back, there’s no problem.”
The Chinese companies, including state-owned China Railway Construction Corp. and Sinohydro Corp., hold 68 percent of Sicomines, while Gecamines and another state-run Congolese company owns the rest. Total investment in the mine is expected to be more than $3 billion.
Production will begin at about 50,000 tons of copper per year, Ekanga said. Eventually it could reach 400,000 tons annually, he said.
Export-Import Bank of China has disbursed about $1 billion for Sicomines and infrastructure projects, including road construction and upgrading of hospitals, Ekanga said.
The bank agreed to continue providing financing for the project after threatening to withdraw last year, which sparked negotiations with China Development Bank Corp. and Bank of China Ltd., Ekanga said. “The two other banks are ready if there is a problem,” he said.
Sicomines and Congo are considering funding options for construction of the 240-megawatt Busanga hydropower plant worth $660 million. It will deliver 170 megawatts to the mine.
The project, which would also provide power to other mining operations in copper-rich Katanga province, may be financed by the Chinese parties or others, he said.
Many of Congo’s copper-mining companies, who together produced more than 600,000 tons last year, have been forced to buy generators or purchase power from neighboring Zambia to make up for a lack of electricity in the country.