Gecamines, the Democratic Republic of Congo’s state-owned miner, is in talks to give China Nonferrous Metal Mining Group a majority stake in its most prospective copper asset.
CNMC will finance, build and operate a copper-processing facility at the Deziwa concession in return for a 51 percent stake in the project, Jean Dominique Takis, head of strategy, said in an interview Tuesday in the capital, Kinshasa.
CNMC will be reimbursed for its investment in the plant, which should have an initial capacity of 80,000 metric tons a year, through an off-take agreement over an agreed period that wasn’t specified, after which ownership of the project will be returned to Gecamines, Takis said. The agreement is a “new type of partnership” designed to increase revenue in coming years, Gecamines Chairman Albert Yuma said last week.
Since Yuma’s appointment in 2010, Gecamines has been trying to boost production after decades of dictatorship and war left its infrastructure destroyed and cash reserves depleted. The company has smaller minority stakes in copper and cobalt projects with companies including Phoenix-based Freeport McMoRan Inc. and Baar, Switzerland-based Glencore Plc that it says have failed to generate the funds required to restore the company’s financial health, leading it to explore different types of partnerships.
The deal adds to the growing presence of Chinese miners in Congo’s copper industry and follows the sale last month of Freeport McMoRan’s Tenke Fungurume copper project to China Molybdenum Co. for $2.65 billion.
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