Congo’s Gecamines 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 35,150 tons of copper last year, Yuma said in a separate e-mail today. That compares with production of almost 500,000 tons at its peak in the 1980s.
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.
In October, Gecamines received $125 million in bonus money from Congo’s $6 billion minerals-for-infrastructure deal with China, and is expecting another $50 million from the deal soon, Yuma said today. The company is also nearing the end of an audit of its joint ventures with partners including Glencore International Plc (GLEN) and Freeport McMoRan Copper & Gold Inc. (FCX), he said.
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