DRC blocks Katanga-Gécamines land deal
Katanga's subsidiary Kamoto Copper Company (KCC) agreed in
December to buy land next to its mine from Gécamines and said it would pay an
initial $150 million.
However, Congolese prosecutors have issued an injunction
preventing the company from consummating the deal until the investigation,
announced in December, has concluded.
"KCC has provided notice to Gécamines that the order
constitutes a force majeure under the agreement and that its obligations under
the agreement are suspended," Katanga said Tuesday.
Prosecutors in the DRC are investigating a €200 million
(US$219 million) line of credit issued to Gécamines by a company owned by
Israeli billionaire Dan Gertler, who is subject to US sanctions.
The land in question includes multiple blocks for
construction of a new long-term tailings facility and the possible exploitation
of additional resources that would enhance KCC's ability to more efficiently
operate its mines and facilities and fulfil other key infrastructure
requirements.
Katanga also said it would delay the commissioning of its
acid plant to the second half of the year due to delays caused by the
coronavirus outbreak. The previous target had been by end June.
KCC is 75%-owned by Katanga and produced 234,500 tonnes
copper and 17,100t cobalt last year. It is an important growth project for
Swiss-based Glencore, and the construction of a new acid plant would help cut
costs at the operation. The Katanga mine complex has the potential to become
the world's largest producer of copper and cobalt.
Katanga shares (KAT:TSX) have fallen nearly 90% in the past
12 months to C6.5c, capitalising it at $4 billion (US$2.85 billion).
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