KINSHASA, Dec 3 (Reuters) – Congo’s Gecamines said on Monday it had signed a production-sharing deal for copper and cobalt deposits with China’s Hongkong Excellen Mining Investment, which will pay a $40 million signing bonus.
Congo’s state mining company said its first production-sharing deal would guarantee it a “significant” share of annual production from the Kingamyambo and Kilamusembo deposits “regardless of the financial results of the project”.
China is the world’s largest consumer of industrial metals and has strengthened its grip over supplies from across Africa in recent years to feed its economic growth. Democratic Republic of Congo is Africa’s top copper producer and the leading miner of cobalt, which is used for electric car batteries.
Gecamines has said that its joint ventures with international miners such as Glencore and China Molybdenum do not bring enough money into state coffers and is turning instead to production-sharing agreements, which are common in the oil sector.
“Production sharing agreements align the interests of the two partners because the risk now weighs more on the investor than on Gecamines,” Gecamines economic adviser Stephane Cormier said in a presentation .