Congo opens Chinese-owned Deziwa copper and cobalt mine (updated)

CNMC Goldmine Holdings

15/01/2020 10:12

(Updates with speech by Gécamines chairman)
    By Stanis Bujakera
    DEZIWA MINE, Democratic Republic of Congo, Jan 15 (Reuters)
- T he Democratic Republic of Congo's state mining company
Gécamines on Wednesday opened the Deziwa copper and cobalt mine
and processing plant, part of a joint venture majority-owned by
China Nonferrous Metal Mining Company (CNMC).
    The Deziwa deposit, around 35 kilometres east of Kolwezi, is
estimated to hold 4.6 million tonnes of copper and 420,000
tonnes of cobalt. 
    Somidez, the joint venture controlling it, is held 51% by
CNMC and 49% by Gécamines.
    An $880 million project which started construction in May
2018, the Deziwa mine aims to produce 80,000 tonnes of copper
and 8,000 tonnes of cobalt per year, according to Somidez.
    In written comments prepared for the launch, Gécamines
chairman Albert Yuma described it as an "innovative" partnership
for Congo, with a greater government stake than other projects
in the country.
    For example, Gécamines holds just 25% of Kamoto Copper
Company, with 75% owned by Glencore subsidiary Katanga Mining.
    The Deziwa mine is the latest example of the close
investment ties China has forged with Congo. Yuma said the two
countries were "united in their wish to strengthen and develop
new industrial and economic relations".
    CNMC will operate Deziwa for nine years, with a possible
two-year extension, before transferring it to Gécamines.
    "Unlike our other industrial partnerships, the lifespan of
our collaboration is already fixed and at the end of it, we will
be the only masters on board," Yuma said in the speech, read out
in his stead at the mine opening which he did not attend.
    Based on known reserves and planned annual production,
Gécamines will operate the facility for a further seven to nine
years, Yuma said, without giving further details.
    Gécamines is being investigated by Congolese prosecutors
over a 200 million euro ($222 million) line of credit issued to
the state mining company by a company owned by Israeli
billionaire Dan Gertler, who is under U.S. sanctions.
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    Another headache for the company is the slide in cobalt
prices, which has hurt Congo's output of the battery material.
Glencore decided in August 2019 to close the Mutanda copper and
cobalt mine - the world's largest.  urn:newsml:reuters.com:*:nL4N2531PX
    Mutanda shut on Nov. 25, a month before the mine was set to
go into maintenance, due to a lack of sulphuric acid.
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 (Writing by Hereward Holland and Helen Reid; editing by Jason
Neely and Mark Potter)
 ((hereward.holland@thomsonreuters.com; +254 20 499 1232;
Reuters Messaging:
hereward.holland.thomsonreuters.com@reuters.net))