The Chinese Gold Mining Focus
On November 18, 2019, the Deziwa or Somidez copper and cobalt mines built by CNMC in Congo Gold were successfully completed. CHINA’S INVESTMENT IN CONGO GOLD MINING IS ENTERING A NEW ERA.
On November 18, 2019, the Deziwa and Somidez copper and cobalt mines built by CNMC in Congo Gold were successfully completed and put into production. On November 20, the nearby Congolese smelter, LCS Pyrometallurgical, a joint venture between CNMC and Yunnan Copper, successfully set up a test and produced the first batch of raw copper. The simultaneous construction and production of the two projects in such a short period of time demonstrates the legacy of CNMC’s early development. A better knowledge of culture in Africa has also strengthened confidence in the further development of other projects in Congo.
The Deziwa Project
Deziwa is located about 35 kilometres west of Kolwezi in Lualaba province. It is adjacent to Glencore’s copper-cobalt mine. In July 2017, China Nonferrous Metals and Gécamines signed a joint venture agreement to form Somidez, with a 51% shareholder allocation for CNMC – 49% for GÉCAMINES. The project is a BOT (construction, operation, transfer) fully funded and developed by CNMC. CNMC’s initial investment will be repaid with free cash flow from the sale of the production. After a maximum period of 9 years, the project will be 100% owned by Gécamines. The total investment of the project is $880 million. Copper and cobalt are produced in an open-pit mine. The volume of ore is 4.5 million tonnes annually for an annual production of 80,000 tonnes of copper cathodes. The project officially entered commercial production in January 2020. By integrating design and construction, CNMC implemented the project on behalf of the owner team, circumventing the restrictions of the new mining law on mining contractors and thus saving taxes and other costs. All of this has drastically reduced construction times.
LCS (Lualaba Project)
LCS (Lusalaba Copper Smelter) is a joint venture created by China National Nonferrous Metals and China Aluminum Group, a subsidiary of China National Nonferrous Metals Corporation, listed in Hong Kong at a ratio of 6 to 4 in April 2017. It is located on the shore of the Lualaba west of the Cobalt and Copper Belt of Congo. The June 4 opening share ratio fully replicates the cooperation model of CNMC and Yunnan Copper at the Chambishi smelter (CCS) in Zambia. The objective of its investment is to serve as a support pyrometallurgical smelter for the Deziwa copper-cobalt mine, and to ensure future copper sulphide processing needs from surrounding mines.
The project also supports the construction of a power plant south of Kolwezi, which will improve power supply in the southern Kolwezi region where the project is located and along the power line. The construction period for the project is two years. It officially began on March 28, 2018 and will create more than 1,500 jobs for Congolese. The LCS project uses the world’s most advanced raw copper smelting technology, with lower energy consumption and better environmental protection. The annual copper concentrate reaches 400,000 dry tons, with an annual production of 118,000 tonnes of raw copper (including copper of at least 98.5%, sulphuric acid 240,000 tonnes [100% H2SO4], 30,000 tonnes of liquid sulphur dioxide and copper-carbon alloy. The total investment of the project is approximately US$437.6 million.
