Chinese company could increase copper reserves through access to Ivanhoe’s projects in Congo
Chinese metals producer Zijin Mining Group Co. said Monday it would acquire almost a 10% stake in Ivanhoe Mines Ltd. for about 105 million Canadian dollars ($82 million), as part of a potentially bigger investment to help the Canadian mining company develop projects in the Democratic Republic of Congo and South Africa.
State-owned Zijin is a large gold, copper and zinc producer in China with additional mining interests in Australia, Russia, Tajikistan and Kyrgyzstan. The 9.9% stake in Ivanhoe Mines offers Zijin the opportunity to increase its copper reserves by giving the Chinese company access to Ivanhoe’s Kamoa and Kipushi projects in Congo’s southern province of Katanga. Ivanhoe is also majority owner of the Platreef platinum, palladium, nickel, copper and gold project in South Africa.
China’s voracious appetite for copper is behind moves to seek out additional reserves of the industrial metal to help feed the Asian giant’s economic growth. However, Congo’s political uncertainty makes investing in that country relatively risky, and in the past has deterred other mining companies from investing there.
“Ivanhoe and Zijin are in detailed, friendly discussions about the strategic co-development of our Kamoa copper discovery,” mining magnate Robert Friedland, Ivanhoe’s executive chairman, said in a statement.
Zijin Chairman Chen Jinghe said his company plans to “closely cooperate in the development of Ivanhoe’s mines.”
Zijin becomes Ivanhoe’s second-biggest shareholder after Mr. Friedland, who owned a 23.7% stake as of June 2014, according to FactSet.
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