DRC: Gécamines has suspended its legal action against China Molybdenum
Congolese state mining company Gécamines has suspended its legal action against China Molybdenum, which was stripped of control of its giant Tenke Fungurume copper and cobalt mine in the country last month, as authorities seek a solution to a dispute between the companies.
The Congolese government announced in August that it had formed a commission to re-evaluate the mine’s reserves and resources in order to “fairly claim (its) rights”. Several Gécamines officials have been named to the commission as the DRC claims it owes it billions of dollars.
In February, a local court appointed a temporary administrator to run Tenke Fungurume for six months after Gécamines, a minority shareholder in the mine, accused China Moly of refusing to share technical information about the project, including the size of the mine. its mineral reserves.
Talks between China Moly chief executive Sun Ruiwen and Prime Minister Sama Lukonde Kyenge over the past few weeks appeared to have resolved some issues.
The Congolese government said on Tuesday that it had drawn up “a roadmap to get out of the crisis, as well as a timetable, so that the two parties reach an agreement”, Communications Minister Patrick Muyaya told the wire. Ministry Twitter.
“In the meantime, the legal proceedings remain suspended in order to restore a peaceful climate of exchange and harmony between the two parties,” Muyaya said.
China Moly said in a separate statement that there had been “significant progress” in negotiations and approved the involvement of an independent third party to resolve its dispute with the DRC government over new royalty payments. .
The Shanghai and Hong Kong-listed company said the engagement of an internationally recognized third party would facilitate expedited dispute resolution and further boost the company’s confidence in investing in the DRC.
Expansion in the balance
China Moly acquired its majority stake in Tenke Fungurume in 2016 for $2.65 billion from US miner Freeport-McMoRan. In 2019, it spent an additional $1.14 billion to increase its stake to 80%.
Last year, the miner announced plans to invest $2.51 billion to double copper and cobalt production at the giant mine. The project, which is expected to be completed and commissioned in 2023, is expected to increase average annual copper production by 200,000 tonnes and increase cobalt production by 17,000 tonnes.
Tenke Fungurume, the second largest copper mine in the DRC, produced 209,100 tons of red metal and 18,500 tons of cobalt last year. The operation is expected to produce up to 267,000 tonnes of copper and 20,500 tonnes of cobalt in 2022.
The DRC has the world’s largest reserves of cobalt, a key ingredient in electric vehicle batteries, and the Tenke mine is one of its biggest employers, with around 7,000 workers and contractors.
