I lifted this off the nzuri copper blog, but I’m wondering if it may apply to the copper zinc cobalt assets of cfe?
Congo halts Sicomines' copper exports, orders local refining
9TH OCTOBER 2017
BY:
BLOOMBERG
KINSHASA – The
Democratic Republic of Congo ordered Sinohydro Corp. and
China Railway
ConstructionCorp.’s
local mining venture to stop exporting unprocessed
copper and cobalt and refine all its metals within the country.
Sicomines must ship “only high-
value products” as the government looks to “ensure the prompt repayment” of the country’s continuing $6-billion minerals-for-
infrastructure deal with
China, Mines Minister
Martin Kabwelulusaid October 2 in response to questions sent by text message.
Sicomines’ profit is paying off the loans
Chinaprovides to
Congo, which will be reimbursed quicker if the mine exports higher value, refined metals.
The $3.2-billion
miningproject operated by
Sicomines accounted for about a quarter of
copper-concentrate and 5% of
copper-cathode exports last year from
Congo,
Africa’s biggest producer of the
metal and the world’s largest source of cobalt.
Sicomines exported 115 000 metric tons of
copper concentrate and 20 000 tons of
copper cathodes in the first half of 2017, according to the Provincial Division of Mines in South Katanga, where the mine is situated.
Sinohydro Corp. and
China Railway
Construction, both based in
Beijing, own 68% of
Sicomines. The
project is a key part of a minerals-for-
infrastructure deal struck between the two countries in 2007, under which the Chinese
companies build infrastructure including
roads and hospitals that are financed by Chinese banks in return for metals like
copper and cobalt.
AUTHORISATION WITHDRAWN
Kabwelulu wrote to
Sicomines Director-General
Sun Ruiwen saying he disapproved of the type of
miningproducts the company is exporting, according to a Sept. 11 letter seen by Bloomberg and confirmed by the minister. The minister said the bulk of the
products exported by
Sicomines are unrefined
copper concentrate and cobalt hydroxide, not processed
copper cathodes and
cobalt metal
Local mining authorities had been instructed to “no longer authorize the
export of
miningproducts other than” processed
copper and cobalt, Kabwelulu said in his letter. Of 112
trucks ferrying exports of the metals, only 44 were allowed to proceed because they were already at the border, he said in a text message.
Sicomines, whose Congolese shareholders include
State-owned miner Gecamines, transports its
products by
road to neighbouring
Zambia.
Sicomines Deputy Director-General
Jean Nzeng said the company responded to the minister’s letter.
“We’re in contact with the ministry to unblock the situation,” he said by phone Oct. 4 from
Kinshasa, the capital. “There are no major problems.”
Copper Output
An April 2008 convention that led to the creation of
Sicomines states that the venture must produce 200 000 tons of
copper cathodes annually by the end of its first year of commercial production and “a corresponding tonnage” of processed cobalt, which is obtained as a
by-product of
coppermining. Output should rise to 400 000 tons of refined
copper in the third year of production, according to the agreement.
Sicomines began production in November 2015 and last year produced 44 000 tons of
copper cathodes.
“
Sicomines must respect the convention,” Kabwelulu said by text message. The company didn’t respond to questions about why it officially exported no cobalt in 2016 or the first half of 2017.
Moise Ekanga, the head of the Congolese department monitoring the
project, said in an interview in October 2015 that a lack of available
power was preventing
Sicomines from working at full capacity and that the company needed an extra 170 megawatts. Sinohydro and
China Railway are currently financing a 240-megawatt, $660-million
hydropower plant to meet
Sicomines’ needs. In a 2015 press release, the monitoring office, which is under the control of the presidency, said that
Sicomines’
copper output would “gradually” rise to 400 000 tons “over the next two decades.”
Ekanga didn’t respond to phone calls, text messages and an email seeking comment.
EXPORT BAN
Congo ordered a ban on the
export of
copper and cobalt concentrate in 2013, but has delayed its implementation on several occasions because the country doesn’t produce enough
electricity to process the
products domestically. Most major producers other than
Sicomines, such as
Glencore and
China Molybdenum, already process their
copper inside
Congo.
Congo’s largest cobalt producers --
Tenke Fungurume Mining, which is 56% held by
China Molybdenum Co. and
Glencore-owned
Mutanda Mining --
export cobalt hydroxide rather than
cobalt metal, according to government data.
Sicomines only began exporting cobalt hydroxide in June, the data shows.
Kabwelulu asked
Sicomines to provide “ample clarifications” about its lack of cobalt shipments during its first 18 months of production despite the fact that its “
mining perimeter contains cobalt minerals,” according to a second letter sent to
Sicomines’ director-general on Oct. 2. The letter, seen by Bloomberg, was confirmed by Kabwelulu’s cabinet director,
Valery Mukasa.
Congo expects to produce 1.05-million tons of
copper this year, up from 1.02-million tons in 2016 and a record 1.03-million tons in 2014. Cobalt output is forecast to grow 22% to 16 619 tonnes.
