Gecamines of Congo Considering Initial Public Offering by 2015Michael J. Kavanagh
Gecamines, the Democratic Republic of Congo’s state-owned miner, is considering an initial public offering within the next two years, said Mbangu Mwangal, head of research and planning.
The company, based in Lubumbashi, is trying to certify about 8 million metric tons of copper reserves to attract financing for several new projects, Mwangal told the iPad mining and infrastructure conference today in the city, which is the capital of Katanga province.
“We’re in the process or raising financing and I think soon, in a maximum of two years,” Gecamines may go public, he said. “The certification will allow us to be more transparent in terms of reserves.”
Gecamines was once one of the world’s biggest copper miners, producing 476,000 metric tons in 1986. Production of the metal almost stopped in the early 2000s after decades of mismanagement at the company and war in the Central African country. The company needs about $2.8 billion in financing to build new production facilities and a coal-powered electricity plant planned under a revitalization program, he said.
Gecamines resumed exploration for the first time in two decades years last year and increased its estimated reserves by more than 900,000 tons, Mwangal said. Output was about 35,000 tons of copper last year and that may increase to 50,000 tons in 2013, he said.
Doubts about Gecamines’ management continue to dog the company. Last year, the International Monetary Fund canceled its $532-million loan program with Congo because of questions about some of Gecamines asset sales.
The company is about to present the results of an audit of all its joint ventures, which may result in the company “taking action” against its partners, Gecamines Chairman Albert Yuma said in an interview on Oct. 3. Companies including Freeport-McMoRan Copper & Gold Inc., Eurasian Natural Resources Corp. and Glencore Xstrata Plc have copper and cobalt ventures with Gecamines in Katanga.
“To go on the stock market you must be credible, you must respect your engagements, and you must respect all the contracts of your partners,” Moise Katumbi, the governor of Katanga, told the conference in response to Mwangal’s remarks.
Congo is the world’s eighth-largest producer of copper and the biggest source of cobalt, which is used in rechargeable batteries.