Showing posts with label Democratic Republic of Congo. Show all posts
Showing posts with label Democratic Republic of Congo. Show all posts

Friday, November 16, 2012

Global industry acts to shield gold’s reputation from effects of conflict

By: Keith Campbell

It is estimated that as many as five-million people lost their lives in the civil war that convulsed the Democratic Republic of Congo (DRC) from 1994 to 2003. Although most of the country then achieved peace, conflict continued in the eastern part of the country, where what has been described by the British Broadcasting Corporation as a “proxy war between Rwanda and the Kinshasa (DRC) government” raged until the end of 2008.

However, war between national government forces and rebels continues to this day, and the settlement between Rwanda and the DRC has collapsed, leading to accusations – supported by a report by a United Nations (UN) panel – that Rwanda and Uganda are supporting a new rebel group in the eastern DRC. According to the UN, the various rebel groups fund themselves through extortion rackets centred on cattle and charcoal, and through the illegal export of valuable minerals. Human Rights Watch has reported that they perpetrate widespread abuses and crimes, including murder, rape and forced labour. This situation has created widespread international concern.

In August, the US Securities and Exchange Commission (SEC) adopted a 356-page-long ‘final rule’ which makes it compulsory for companies to report on their use of minerals from the DRC and adjacent countries. The SEC was required to do this in accordance with Section 1502 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

“The statute explains that the exploitation and trade of conflict minerals by armed groups is helping to finance conflict in the region and that the emergency humanitarian crisis there warrants these disclosure requirements,” said SEC chairman Mary Schapiro, opening the meeting that adopted the final rule. “As reflected in Section 1502 of the Act, [the US] Congress intended to further the human- itarian goal of ending the extremely violent conflict in the DRC, which has been partially financed by conflict minerals originating in the DRC. Congress chose to use the securities laws disclosure requirements to accomplish its goal.” The main minerals and metals covered by the Act and the final rule are gold, tantalum, tin and tungsten.

 

Monday, November 5, 2012

Southern Hemisphere Mining completes US$5M placement at 47% premium

Southern Hemisphere Mining has completed the recently announced US$35 million farm-in agreement and aUS$5 million share placement with the C$3 billion Lundin Mining Corporation.

The two companies recently executed a deal that will see Lundin Mining spend up to US$35 million (A$34 million) on exploration at Southern Hemisphere’s flagship Llahuin Copper-Gold Project in Chile to earn a direct stake of up to 75% over a six-year period.

Lundin Mining has now also taken a strategic 11.5% stake in Southern Hemisphere by way of a US$5 million share placement at C$0.25 (A$0.25) per share on the TSX-V, representing a 47% premium to Southern Hemisphere’s current share price.

Importantly, the initial joint venture budget provides for an accelerated drilling campaign at Llahuin.

Lundin Mining is a diversified Canadian base metals miner with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel.

The company’s development project pipeline includes an expansion at its Neves-Corvo mine in Portugal and an equity stake in the world class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo, which is currently undergoing a major expansion.

Trevor Tennant, managing director, said the agreement would bring a host of benefits for the company and the Llahuin Project.

“This is a significant event for Southern Hemisphere. Lundin is a C$3 billion company and its extensive experience in exploration, mine development and mine operations, as well as its immense financial standing, brings major benefits and validates our work at the Llahuin Copper-Gold Project over the past 15 months.

“Our joint venture partnership with Lundin shows our shareholders a clear path forward with the Llahuin Project.

“The Llahuin joint venture with Lundin Mining is and will remain our key focus but we are also aware of other copper-gold opportunities within the Coquimbo Region of central Chile which may provide additional future opportunities for Southern Hemisphere.”

Tuesday, May 22, 2012

Glencore Takes Control of Mutanda With $480M Deal

Glencore has taken majority control of its fast-growing Mutanda copper operation in Congo with deals worth $480 million, marking the first step in a planned merger of the mine with its nearby Kansuki concession.

Mutanda, in central Africa's copper belt, is one of Glencore's main growth assets and a key operation in the Democratic Republic of Congo alongside its Katanga asset, largely thanks to its high ore grades and low expansion costs.

But Tuesday's deal, with two related, privately controlled groups - High Grade Minerals (HGM) and Groupe Bazano - whose ownership is not disclosed by Glencore, is also likely to revive debate over the opacity of deals in one of Africa's most promising but also most challenging mining destinations.

Glencore, a lightning rod for campaign groups since its listing last May, earlier this month faced calls for greater transparency around its deals in Congo.

The company said on Tuesday it had paid $340 million in cash to acquire both a further 24.49 percent in Samref Overseas, the top holding company above Mutanda, taking its hold in the controlling entity to almost 75 percent, and a further 1 percent in Samref Congo, a second holding company. The deals take its indirect equity interest in Mutanda Mining to 60 percent.

Glencore, hoping to accelerate development of the copper operations with Tuesday's move, has also acquired shareholder debts amounting to around $140 million.

"The acquisition represents a significant first step towards achieving Glencore's previously announced intention to merge the Mutanda and Kansuki mining operations," Glencore said.

Glencore has the right to acquire the remaining 25.5 percent stake in Samref Overseas still held by HGM for $430 million in December next year, subject to the terms of a put and call option agreement.

The combination of Mutanda, already producing at an annualized copper rate of 78,000 tonnes per year, and the extensive Kansuki concession will produce 160,000 tonnes per year of copper cathodes and 23,000 tonnes of cobalt in hydroxide by the first half of next year.

Analysts welcomed what they said was progress on Glencore's plan to integrate Kansuki and Mutanda and boost its production profile, but anti-corruption group Global Witness said Glencore should give more detail on its counterparties in the deal.

The pressure group earlier this month revived concerns over the sale of a direct 20 percent stake in Mutanda last year by Congolese state mining company Gecamines to influential Israeli businessman Dan Gertler for $120 million, a price tag which some analysts have said was below its real value.