Whilst nobody can know for sure what the courts in the DRC will decide in regards to Glencore and KCC, there are some basic things to bear in mind that will most likely lead to a positive outcome for all parties involved.
1/ Glencore has recently signed an agreement to supply 52,800 tonnes of Cobalt per year to the Chinese and 34,000 tonnes of that agreement is slated to come from the KCC Copper/Cobalt mine situated right next door to TAR tenements. Do you think Glencore will jepordise losing that supply contract to the Chinese when Cobalt is trading at US$90,000 /tonne?
"Mining giant Glencore (LSE:GLEN) has signed a cobalt supply deal with Chinese battery recycler GEM (SZSE:002340).
Under the deal, the Swiss trader will sell 52,800 tonnes of cobalt contained in hydroxide to GEM over the next three years. Cobalt is an essential metal in the lithium-ion batteries used to power electric cars.
“With the rapid growth of global new energy car production … cobalt has become a global resource in short supply,” GEM said. Consumers are now racing to secure supply.
In fact, cobalt supply will need to reach 180,000 tonnes by 2026 from just 48,000 tonnes in 2016 to fulfill the increasing demand for electric cars, Benchmark Mineral Intelligence says." https://investingnews.com/daily/res...glencore-signs-cobalt-supply-deal-chinas-gem/
2/ The issue with the Israeli may not be able to be resolved by a DRC court because the Americans have banned any Companies from making payments to the Israeli because of his fraudulent business activities.
"Glencore said the court order authorised the commercial court bailiff in Kolwezi in the DRC to “freeze certain bank accounts”, assets and titles over mining assets. Mr Gertler’s company, Ventora Development Sasu, is seeking $695m of damages from Mutanda Mining and $2.28bn from the Kamoto Copper Company, both subsidiaries of Glencore in the DRC, for royalties it claims it is owed.
Glencore disputes those figures. In 2017 Glencore paid $534m to buy out Mr Gertler’s stakes in its two copper and cobalt mines in the DRC, one of Africa’s most resource-rich countries. But Mr Gertler is still due royalties from the operations under previous contracts. “Glencore denies that Mutanda and KCC are in breach of their obligations under their respective agreements,” the Switzerland-based company said. “Mutanda and KCC will vigorously contest the freezing order and any subsequent proceedings.”
People familiar with the matter said Glencore would launch an appeal as early next week. Mr Gertler could not be reached for comment. In February Ivan Glasenberg, chief executive of Glencore, said the company was “working on its obligations” to Mr Gertler and would follow the correct procedures. “We have not paid any royalties to him” since Mr Gertler was sanctioned, Mr Glasenberg said. “Royalties are owed later on. We are awaiting for the conclusion within the compliance team.”
When Mr Gertler was added to the sanctions list in December, the US Treasury said the businessman had “amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals” in the DRC. He had, it said, used his close friendship with President Joseph Kabila “to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state”.
Glencore wins temporary injunction against billionaire Dan Gertler
"May 1 (Reuters) - Glencore Plc has won a temporary injunction against Israeli billionaire Dan Gertler over alleged unpaid royalties he said he is owed by the company, the Financial Times reported on Tuesday.
Last week, Glencore said its mining subsidiaries in the Democratic Republic of Congo were served freezing orders for alleged unpaid royalties of nearly $3 billion by a company affiliated with Gertler.
A spokesman for Glencore declined to comment. Gertler’s Fleurette Group and his foundation did not immediately respond to a Reuters’ request to comment.
Gertler, who is the subject of U.S. sanctions, is owed some royalties by Glencore, but the London-listed company disputes the amounts claimed.
Gertler’s Ventora Development Sasu is seeking $695 million in unpaid and future royalties from Glencore’s unit Mutanda Mining and $2.28 billion from Glencore unit Kamoto Copper Co (KCC)
The injunction forbids Gertler from taking any steps in his legal action against the KCC mine, the FT said.
There will be a hearing on the case in London on May 11, the newspaper said."
"Albert Yuma, Gecamines chairman, said in February that the country was not benefiting from rising copper and cobalt prices because foreign miners had allowed costs to balloon and structured investments to their subsidiaries as expensive loans. Recommended Lex Damage to Glencore likely to be limited despite unrest in DRC KCC has largely been funded with debt provided by Glencore because international banks are wary of the DRC. During development of its mines, losses and interest have built up at KCC leading to a capital deficiency. Under DRC law, this needs to be rectified.
Analysts say Glencore can do this either by a debt-for-equity swap or debt forgiveness, which is its favoured option, according to people familiar with its thinking. “KCC has made numerous attempts to engage in constructive negotiations with Gecamines regarding the recapitalisation plan,” Katanga said in a statement. “However, Gecamines has, instead of meaningfully engaging with the company, unilaterally commenced the proceeding.” It said that based on current projections, cash flows of KCC are “expected to be sufficient to allow the repayment of outstanding shareholders debt and to fund distributions to shareholders, including Gecamines.”
A court hearing is scheduled for May 8. “The most likely (and conservative) outcome . . . is for Katanga to forgive a portion of such debt as a change in the equity split of 75/25 per cent is likely to face heavy resistance from Gecamines,” said David Pleming, analyst at HSBC. "
As for processing TAR's Cobalt and Copper i'm management will find the best cost efficient option in the local area. Their are a lot of Copper/Cobalt mines in this region near Kolwezi. Glencore is only one of many big operators in the region. Have total confidence in managements ability to move this project forward for a positive outcome to benefit all of us shareholders. The way they recently dealt with the delay in the drilling really impressed me and showed me this management team knows how to get things done in the DRC inspite of challenges.
TAR Price at posting:
26.0¢ Sentiment: Buy Disclosure: Held
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