Katanga Mining withholds $250m payment to Gecamines whilst executives investigated
KATANGA Mining will withhold payment of $250m for land it
agreed to buy from Gecamines in the Democratic Republic of Congo (DRC’s) whilst
executives at the state-owned firm were being investigated, said Reuters in a
report.
Katanga’s subsidiary Kamoto Copper Company (KCC) agreed in
December to buy land adjacent to its mine from Gecamines and said it would pay
an initial tranche of $150m. Katanga Mining is a subsidiary of Glencore.
Katanga said in a statement that it had received an
injunction order from Congolese prosecutors that prevented it from making
payments until the investigation, which was announced in December, was
concluded.
“KCC has provided notice to Gecamines that the order
constitutes a force majeure under the agreement and that its obligations under
the agreement are suspended,” Reuters quoted Katanga to have said. Katanga
referred to a clause in contracts that allows certain terms to be ignored
because of unavoidable circumstances.
Prosecutors in Congo are investigating a $219m line of
credit issued to Gecamines by a company owned by Israeli billionaire Dan
Gertler, who is under US sanctions.
Katanga also said it would also 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 the first half of 2020.
KCC, which is 75%-owned by Katanga, produced 234,500 tons of
copper and 17,100 tonnes of 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.
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