Congo Miner Renegotiates ERG Joint Venture to Boost Revenue – by William Clowes (Bloomberg News – December 11, 2018)

Democratic Republic of Congo state mining company Gecamines said it renegotiated a joint venture with Eurasian Resources Group Sarl to boost its share of revenue from the project.

It’s the second time this year the company has remodeled agreements with other firms, after ending a dispute with Glencore Plc in June over one of Congo’s biggest copper and cobalt mines. Gecamines Chairman Albert Yuma has repeatedly criticized existing partnerships as too generous to foreign investors.

Gecamines boosted its stake in ERG subsidiary Boss Mining SPRL, a copper and cobalt producer, to 49 percent from 30 percent under the rearranged accord, the Lubumbashi-based company said in a statement on Monday. ERG also converted into equity more than $1.5 billion of intra-group loans granted to Boss Mining, it said.

The new agreement includes a “detailed business plan allowing for a close monitoring of the returns” such as dividends to shareholders including Gecamines and profit taxes to the state, the company said.

It also provides for a $30 million payment to Gecamines and a re-evaluation of a signing bonus that Boss Mining paid for its deposits, which will now be calculated at $165 per metric ton of copper instead of $35.

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