Gecamines May Seek Partner to Develop Congo Copper Sites
Gecamines, Democratic Republic of Congo’s state-owned mining company, is considering seeking a partner to develop two copper sites that may contain 5 million metric tons, Chief Executive Officer Ahmed Kalej said.
The Lubumbashi-based company completed its takeover of the Deziwa and Ecaille C copper-cobalt projects in the southern Katanga province on Jan. 11 after buying out Copperbelt Minerals Ltd.’s indirect 68 percent stakes. The sites may eventually produce a combined 200,000 tons of copper a year, making them one of Congo’s biggest, Kalej said yesterday in an interview in Lubumbashi.
“It’s a very big project, it’s magnificent,” Kalej said. “The reserves are there and that constitutes a great guarantee, which will allow us to get financing on the international market, or we can enter into a partnership.”
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, according to Chairman Albert Yuma, compared with peak output of almost 500,000 tons in the 1980s.
Deziwa and Ecaille C are situated in nearby mines operated by Glencore International Plc (GLEN) and Freeport-McMoRan Copper & Gold Inc. (FCX) Building a copper plant at the sites may require as much as $1 billion of investment, Yuma said on Jan. 16.
Copper for delivery in three months climbed as much as 0.7 percent to $8,223 a metric ton on the London Metal Exchange before easing to $8,215.75 at 8:19 a.m. in Johannesburg.
Gecamines and closely held George Forrest Group are also near to wrapping up talks with Cleveland-based OM Group Inc. (OMG) to take over its stake in the so-called Big Hill project, an operation which refines cobalt tailings in Lubumbashi, the capital of Katanga province, Kalej said.
Gecamines, Freeport-McMoRan and Lundin Mining Corp. (LUN) agreed to buy OM Group’s cobalt chemical refinery and sales business in Kokkola, Finland for as much as $435 million, Lundin said on Jan. 21. Freeport will own 56 percent and Lundin 24 percent of the joint venture, while Gecamines will own the remainder.
That’s Gecamines first investment outside Congo, Kalej said. Freeport and Lundin will finance the purchase of its stake, he said. The three companies are already partners in the Tenke Fungurume copper-cobalt project in Katanga, the biggest single mining investment in Congo.
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