The Democratic Republic of Congo wants Ivanhoe Mines Ltd. to postpone a sale of shares in its Kamoa copper project to Zijin Mining Group Co. until the government has a chance to decide about increasing its own shareholding.
Congo is negotiating with Ivanhoe to raise its stake to 20 percent from the current 5 percent, Mines Minister Martin Kabwelulu and Portfolio Minister Louise Munga Mesozi said in an e-mailed statement on Tuesday. Zijin, which is based in China’s Fujian province, announced last month it planned to acquire 49.5 percent of Ivanhoe’s Kamoa Holdings Ltd. for $412 million. Kabwelulu at the time said the government wasn’t informed about the deal and he called for a meeting with Ivanhoe executives.
The agreement “should be suspended until the completion of the discussions the government has undertaken,” according to Tuesday’s statement. A due-diligence review will be carried out soon to evaluate the legal situation, it said. Congo is Africa’s largest copper producer.
Ivanhoe said in an e-mailed statement on Wednesday that Congolese law didn’t require the government to consent to its share sale to Zijin. The company disputed the need for a due diligence review, and any review “should not delay the closing of its proposed transaction with Zijin,” it said.
Ivanhoe remains committed to negotiating an agreement for the government to increase its stake in the project by 15 percent, according to the statement.
Shares in Ivanhoe dropped 4 percent to $0.96 by 10:25 a.m. in Toronto, extending Tuesday’s 3.9 percent decline.