Date: 17-May-2007


Congo sees Rautenbach as root of CAMEC's problems
Wed May 17, 2007 7:43 PM BST

26It has suggested Kasongo's statements may be commercially motivated, following the company's recent acquisition of a 22 percent stake in rival Katanga Mining.

Kasongo said the deal had yet to receive approval from Congo's state copper miner Gecamines, a partner in the project.

Rautenbach, who owns an 8 percent stake in CAMEC, has a long business history in Congo. He was previously appointed head of the bankrupt Gecamines during a period when Zimbabwe was supporting the Kinshasa government against rebel groups.

The majority of Congo's mining deals were negotiated during the six-year war or the subsequent three-year transition, which saw rebel groups and government loyalists govern the country in the run-up to elections. Many of those contracts have come under heavy criticism at home and abroad for irregularities.

Encouraged by the belief that last year's elections will usher in a new period of stability, interest from major international mining companies in Congo's vast mineral wealth has flourished in recent months.

Congo lifts ban on mineral exports
Reuters 04 mai. 07
Kinshasa - Mineral exports from Congo's eastern Kivu provinces restarted on Thursday after the government granted shipment licences to 11 companies, ending a two-week ban, exporters said.

Mineral-rich Democratic Republic of Congo suspended exports from its North and South Kivu provinces - which produce cassiterite, tungsten ore and coltan - last month to ensure "counters" which process and export minerals had licences.

"We have already started exporting today," Antoine Bizi, managing director of Amir, one of the mineral-exporting companies which operate in the provinces, told Reuters.

The ban on mineral exports from the Kivus announced on April 19 was part of an effort by Congo's new government to tighten mining regulations following the former Belgian colony's first free elections in four decades last year.

The government, installed in February, required companies to apply for licences that showed minerals were processed in Congo.

"We found that 11 (companies) had processing facilities. They met the requirements. The minister signed their documents on Tuesday," Deputy Mines Minister Victor Kasongo told Reuters.

Mining in the Kivu provinces is largely small-scale. In order to qualify for permits, counters must show they have the equipment necessary to wash, crush and treat minerals.

Amir's Bizi said his company had continued to buy and stockpile minerals while the ban was in force.

But other exporters operating in the Kivus complained that they had not been granted licences.

Gilbert Makilele, director of the minerals exporter MH, said his company had been operating within Congo's laws, even though it had no treatment facilities of its own.

"We don't export untreated minerals. There are companies who do have facilities and we pay a percentage to treat (our minerals) there," he said.

It was not clear how many more licences the government would grant.

The eastern border provinces exported 5 300 tons of cassiterite and 499 tons of tungsten ore, or wolframite, in 2006, and North Kivu alone exported 40 tonnes of coltan.

But due to widespread smuggling, in many cases by armed militia and the Congolese army, official exports represent only a fraction of the minerals that make it over the border.
DRC suspends new mining deals and to review all contracts REUTERS 03 Apr. 07
DRC is halting all current and future mining negotiations until a review procedure for existing contracts can be implemented.

Posted: Monday , 02 Apr 2007

Democratic Republic of Congo is suspending negotiations on future mining deals in the mineral-rich central African country until a mechanism to review existing contracts is created, the minister of mines said.

The move had been widely anticipated following the installment in early February of a new government in the vast, former Belgian colony, which holds a tenth of the world's copper reserves and a third of its cobalt reserves.

"The minister ... instructs state administrators of the mining sector to suspend until fresh instructions all negotiation on new partnerships until after the government has launched a review procedure for existing contracts," Minister Martin Kabwelulu said in a March 27 memo seen by Reuters.

Kabwelulu ordered that details of all existing mining partnerships be delivered to his office by Wednesday, April 4 at the latest.

Any violations of the memo's orders would be subject to severe sanctions, including the possible revoking of contracts, he said in the document.

Interest in the Congo from major international mining companies has soared since the country last year successfully held its first free elections in 40 years, supervised and protected by the largest U.N. peacekeeping force in the world.

President Joseph Kabila won the polls, which were aimed at ushering in a new era of growth and stability after a devastating 1998-2003 war and years of chaos and corrupt rule.

Congolese officials had made clear that a sweeping review of mining contracts was being prepared, following domestic and international criticism that many deals signed during the war and the pre-election transition contained irregularities.


"It's part of the government's policy to reassess existing contracts. Many companies are still trying to sign new contracts. We have to halt for a moment," Deputy Minister of Mines Victor Kasongo told Reuters on Monday.

He said some Congolese state mining officials had continued trying to conclude new mining deals with foreign companies, despite internal orders to the contrary.

"Most of the company officials are transitional government appointees, who have nothing left to lose. They were signing deals when instructions were given not to sign," he said.

Among the companies operating in Congo's fast-expanding mining sector are the world's largest diversified miner BHP Billiton <BLT.L><BHP.AX>, AngloGold Ashanti <ANGJ.J>, the world's third biggest gold producer, and U.S. major Phelps Dodge, recently purchased by Freeport-McMoRan Copper & Gold Inc. <FCX.N>.

Hopes for a stable democracy in Congo were dented last month when militiamen loyal to former warlord and defeated presidential contender Jean-Pierre Bemba battled with government troops for two days in the capital Kinshasa.

Up to 600 people were reported to have been killed in the fighting, European ambassadors said.
International Work Office to improve the working conditions of miners - MONUC - 20 mar. 07
The International Work Office has just launched a project to improve the working conditions of miners in the Katangan mines, which aims to reinforce the institutional and human resource capacities in the DRC mining sector. Furthermore, the project will be applied at grassroots level, to encourage the mining industry towards good governance, durable development, respecting workers rights, as well as social dialogue.

This work will be executed in three phases. The conditions of work in the Democratic Republic of Congo are inhuman, where men as well as women and infants work to extract minerals in deep and poorly lit mines without any protection.

Even though there are a lot of fatalities because of poor working conditions, no measures have been taken to improve working conditions in the mines. Even worse, the majority of miners work without any form of contract. Because of all these reasons the International Work Office (IWO) has initiated the project which has four main parts.

The first consists of making a feasibility study of the needs of the target groups in relation to the improvement of working, security and health conditions of artisinal (informal) miners, and to reinforce the capacity of partners (syndicates and others), according to their needs and capacities.

The second part consists of reinforcing social dialogue and worker and employer representation, particularly in the informal sector. A joint tripartite mines committee will be put in place with the aim of institutionalizing social dialogue, both for the formal and informal mining sectors

As well as partnership, the inspection of the mining work will commence and the workers themselves will be trained in mediation and advice techniques with the aim of resolving work conflicts.

The third part concerns the organisation of informal workers into cooperatives. The IWO will support the organization of EMAK (an informal organization for the training of artisinal miners), which has institutional weaknesses, especially a lack of management transparency.

The project also aims to reinforce, in the form of pilot projects, the capacities of cooperative members, to organise and develop productive activities with the aim of creating proper working conditions.

It will also support the reinforcement of a female artisinal cooperative with the same aim.

Finally, there will be sensibilisation campaign at the national and international level with regard to social responsibility in the mining sector, in partnership with “Group One”.

This project also aims to enlighten important actors and public opinion on the working conditions in the mines. It will evaluate the impact of the improvement in the working conditions and productivity of the target groups, and will launch a national campaign which will focus on this issue, as well as the economic potential of the mining sector.

Therefore, once the feasibility study has been realised, a network of trainers will be created who will focus on the improvement of working, health, security and environmental conditions in the mines, as well as the productivity and capacities of workers.

The training and a sensibilisation campaign for workers and employers in the sector will focus on the impact of HIV/Aids and the code of conduct of the IWO. The training and sensibilisation classes will be also given to local communities, local authorities, employers and others in need.

They will also be given support in organising a mutual community health insurance fund. After this, they will a sensibilisation campaign on the strategy of promotion of social dialogue, adapted to the particular needs of the mining sector.

This work will succeed in developing a culture of dialogue, with the creation of the tripartite committee in the mining sector and the putting in place of a watchdog project
through a pilot provincial committee, under the tutelage of the tripartite commission.
Congo accuses Canadian mining firm of ‘cheating’
The EastAfrican
March 10, 2007
Moto Mines Ltd, an Australia-based gold mining company listed on the Toronto Stock Exchange has found itself in the thick of an embarrassing controversy with authorities in the Democratic Republic of Congo, over a gold mining contract it entered into with the state-owned Okimo Mines Ltd in 2003.

The Canadian company, which operates in Congo under a local subsidiary, Borgakim Ltd, has been accused by the Congo government of misrepresenting to the markets the true value of the rights granted to it over some eight mines within the Kilomoto area, thus managing to raise between $60 million and $80 million from the Toronto Stock Exchange.

Apparently, the agreement covered a total of eight mines, seven of which were leased to the Canadians by Okimo Ltd under terms whereby the Canadian company will earn 70 per cent of the revenue and the state-owned company 30 per cent.

The eighth mine — consisting of Karagwa, Durba and Chauffeur mines — with indicated and inferred reserves of 12 million ounces of gold — was granted to the Canadians on a service contract basis.

According to articles three and four of the service agreement on the property, the Canadians were to act as financial and technical consultants and undertake an extensive exploration programme to establish a proven reserve base after which Okimo Ltd will undertake actual mining.

The agreement also stipulated that the Canadians would rehabilitate the infrastructure of the world famous Kilomoto mines.

The agreement further stated that the company would invest up to $100 million and be paid 70 per cent of revenues for a period to be determined at a later date — after which date 100 per cent ownership and the operations would revert back to the state.

Four years later, the total expenditure to date, as reported by the Canadians themselves, on the eight mines is over $25 million, of which some $4 million-$11 million was spent on the eight properties under the service contract.

According to Congolese authorities, the Canadians have not spent any money on rehabilitation of the physical facility and have instead been concentrating on drilling the mines for more gold, which the authorities believe is a tactic to shore up the market capitalisation of Moto Mines at the Toronto Stock Exchange.

The controversy escalated when officials of the Canadian company told the Reuters news agency on February 26 that the company was still awaiting ratification of another protocol signed with the authorities in November 2006 before it can consolidate its operations.

The following day — February 27 — Assistant Minister for Mineral Exploration, Victor Kassongo told Reuters that a notice had been given to the Canadian company on January 26 informing them that the view of the government was that they (Moto Mines) were in breach of the contract on four of the mining properties.

Officials in Kinshasa have expressed concern that the Canadians have given a perception to the investing public that it is earning an interest and owns some other mines and has — contrary to the agreement — used proprietory information to promote the company’s stock on the Toronto Stock Exchange.

Market watchers are following the controversy closely to see whether there are parallels with Bre-X Ltd — formerly a Canadian listed company, that lost billions in the stockmarket within days over claims that it had misrepresented the value of gold properties it owned and managed in Indonesia.

In response to the statement by Congo authorities, the Canadian officials are claiming that Okimo’s notice is unjustified and the state-owned body is in breach of contract.

Meanwhile, a Paris-based law firm — White & Case — which was engaged by authorities in Kinshasa to look into the matter, has supported DRC’s position, pointing out that the agreement on the disputed mines merely gave the Canadians the right to provide technical and financial assistance at a fee — and not an option to earn interest.

Mining pundits in the region are seeing parallels with a deal between Kenya and China’s National Offshore Oil Co-operation, which has been given rights over six oil exploration blocks but has secretly gone behind the government’s back to seek joint partners without informing Kenyan authorities.

As the ministry awaits the outcome of the Moto saga, Mr Kassongo told The EastAfrican in an exclusive interview that the government’s plan in the coming months will be to take Okimo Ltd to the public market through the Toronto Stock Exchange, London Stock Exchange and its AIM market.

The minister said the government plans to raise $45 million by selling 15 per cent stake of the state company. The proceeds will be used to rehabilitate the mining infrastructure and also in an extensive exploration programme.

Mr Kassongo also disclosed that he had started discussions with Uganda’s Department of Geological Survey and Mines to see if joint surveys can be undertaken.

The new Kinshasa government says it wants the mining industry to contribute $1 billion in revenues in the next 12 months said Mr Kassongo.

To achieve this, he further said that the government is reviewing all mining contracts and re-evaluating the commitments and obligations international mining companies have made. “Those in default will be advised to ‘shape up or ship out,” he said.

Mr Kassongo lamented that although Congo is endowed with significant minerals and known reserves, its annual budget is only $2.5 billion compared with Angola which has an annual budget of over $29 billion

Copper/cobalt bull elephants square up in the DRC
An extraordinary drama unfolds in the multi billon dollar Katanga copper-cobalt fields as Camec gains control of 22 percent of Katanga Mining with an agreement to purchase another 7.7 percent.

Author: Barry Sergeant
Posted: Sunday , 06 May 2007
JOHANNESBURG -  In events that have confounded even some specialist investors, Central African Mining (Camec, LSE:CFM, £0.56 a share) announced on Friday that its has gained control of 17m shares in Katanga Mining (TSX:KAT, C$15.63), a stake of 22%, and has an agreement to buy another 7.7%. The cold transactions belie an extraordinary drama unfolding in the multi billon dollar Katanga copper-cobalt fields.

One important link is Billy Rautenbach, a Zimbabwean citizen who South African authorities want on South African soil. On Sunday, sources in Harare confirmed that Rautenbach would be leaving the city on Monday, for Lubumbashi, in the Katanga province of the Democratic Republic of the Congo (DRC). It is understood that Rautenbach may be leaving Harare for good, given the recent filing in Harare of extradition papers by South African authorities.

It is no secret that following a deal in February last year, Rautenbach holds around 17% of Camec's shares. The issue that's likely to burn some tender parts in investment circles is the presence of Georges Forrest, the "old King of the Congo", and a standing 22% shareholder in Katanga Mining. Of all the projects in the fabulously copper-cobalt rich Katanga province, some with dubious pedigrees, few have cleaner papers than Katanga Mining, Nikanor (LSE:NKR, £6.19) and Tenké Mining Corp (TSX: TNK, C$25.01), owned 57.75% by copper giant Freeport McMoRan (NY:FCX, $71.63).

However, of these three mega projects, there is no question that Katanga Mining will be first in production. Nikanor is battling with cost overruns and an intractable flooding problem, while the Tenké Fungurumé project may only come on stream early in 2009. At Katanga Mining, operational cost over the life of mining is likely to be around $0.45/lb, amongst the lowest in the world. First copper production is anticipated in December 2007.

While Camec is known not least for executives Phil Edmonds, who once played cricket for England, and Andrew Groves, a young wheeler dealer, Katanga Mining is characterised by a small army of professional mining executives, not least Robert Buchan and Arthur Ditto, who each own around 7.5% of the company.

The background to the past week's power outbreak in Katanga can be most conveniently traced back to February last year, when Camec bought Rautenbach's apparent rights to mining concessions 467, 469 (previously named C19 & C21) in Katanga province, and 50% of the cobalt-rich Mukondo concession. The other half of Mukondo was sold in June for around $60m by John Bredenkamp, also a Zimbabwean, to Dan Gertler, known as the "new King of the Congo". Gertler is a 14% shareholder in cash-strapped Nikanor, which last week announced that it was involved in negotiations over a possible change of control.

Gertler, the foreigner closest to the ear of DRC president Joseph Kabila, immediately ordered a halt to activities on Mukondo, and nobody appears to be clear about what happened next. Rautenbach's intractable attitude has played a part, along with his contract with Camec to run Mukondo.

Camec has fiercely denied any problems with ore supplies; on the contrary, on March 1, it stated that it's on target to produce 40,000 tonnes of copper cathode and 6,000 tonnes of cobalt cathode and concentrate for the 2007-8 financial year. Camec's DRC metallurgical facility, moreover, has targeted annual production template capacity of 100,000 tonnes a year of copper cathode, according to Camec, and 12,000 tonnes a year of cobalt cathode by 2008-9.

Rautenbach has had squabbles in and around the Katanga copper-cobalt belts for years. In November 1998, he was named the MD of state-owned copper-cobalt miner La Générale des Carrières et des Mines (Gécamines) during a visit to Harare by then-DRC president Laurent-Désiré Kabila. Some of Gécamines' best cobalt-producing areas were transferred to a joint venture between Rautenbach's Ridgepointe International and the Central Mining Group, a Congolese company controlled by Pierre-Victor Mpoyo, then DRC minister of state. Rautenbach, who had no mining experience, was also made MD of the joint venture. Rautenbach's business practices saw Kabila replace him with Forrest in March 2000.

Rautenbach was stripped of all connections to Katanga, including the Kambove and Kakanda processing plants, and the large parcel of deposits known as the Kababancola Concessions, including Mukondo. These assets were officially transferred to Bredenkamp's Tremalt, which established a new joint venture, Kababancola Mining Company (KMC).

It was thus that Bredenkamp held rights to exploit six Gécamines concessions containing at least 2.7m tonnes of copper and 325,000 tonnes of cobalt over 25 years, all for a piffling payment of just $400,000. Put another way, Bredenkamp continued where Rautenbach left off, but split the profits as to 34% for the DRC government, 34% for the Zimbabwe government, and 32% for Tremalt, after generous gratuity payments to senior political and military figures in the DRC and Zimbabwe.

Kabila was assassinated in January 2001, and replaced by his son Joseph and it was another year before Rautenbach's name cropped up again. This time he emerged as one of the largest exporters of heterogenite (cobalt ore) from the DRC, via Congo Cobalt Company, known as CoCoCo.

But then Rautenbach's name was also linked to another DRC entity, Boss Mining which, it was said, had acquired two lucrative mining concessions, C19 and C21, as well as 50% of Mukondo. These were, of course, part of the same portfolio of assets once stripped from Rautenbach and dealt to Bredenkamp.

Early last year, in an affidavit submitted to the British Virgin Islands High Court by a Rautenbach ex-partner, Geneva-based lawyer James Anthony Tidmarsh, Rautenbach was allegedly offered an opportunity as a "sleeping partner" in KMC, but refused and launched an international arbitration action to challenge his being stripped of the concessions.

In April 2002, Rautenbach withdrew the application following a settlement with the government of the DRC. KMC was apparently simply presented with an instruction from the DRC government to transfer its most valuable assets to Rautenbach's Boss Mining, or face losing the lot.

Camec has played the Mukondo issue right down. In its interim results notice on December 5 2006, shareholders were told that Camec's "joint venture partners at Mukondo were taken over and the new owners gave us formal notice to terminate operations until a new operational agreement was effected". In other words, Gertler wanted a fair deal.

Discussions were continuing, but, Camec added, as Camec's Luita processing plant comes on stream, Mukondo operations "become of less relevance". Concessions C19 and C21, Camec stated, "host numerous significant copper cobalt deposits, which are already being developed to feed Luita to maximum capacity".

The DRC recently appointed a Commission under the authority of the Minister of Mines to review various mining agreements entered into by the DRC government, or by state bodies such as Gécamines, within a period prior to mid-July 2007. Some 60 mining agreements fell for review starting on May 15, with a decision expected after mid-July 2007.

Katanga Mining's Kamoto agreement was ratified by presidential decree on August 4 2005; Nikanor's titles were similarly ratified on October 13 2005, and the Tenké Fungurumé agreements on October 27 2005. However, presidential decrees are not everything, and even these contracts may be scrutinized for fairness and equity. In Camec's case, by contrast, objections may be raised over more fundamental issues, not least how the contracts were first obtained during the DRC's 1997-2003 war, under the Zimbabwe military's Operation Sovereign Legitimacy (Osleg).

Congo Suspends Negotiations on Mining Deals
By Franz Wild- VOA - Kinshasa 02 April 2007
Democratic Republic of Congo has suspended all negotiations on mining contracts, while reviews existing deals. Home to a 10th of the world's copper, with substantial gold, diamond and cobalt deposits, Congo has attracted billions of dollars of mining investment in recent years. Franz Wild has the details for VOA from Kinshasa.

Government officials are not to engage in any negotiations over mining contracts until further notice, Mines Minister Martin Kabwelulu said in a ministerial order seen by VOA.

Since taking office a month ago, Kabwelulu has established a commission to review all existing contracts. He said this process should be completed before further deals are made.

Non-governmental organizations say corrupt officials signed off on many of the lucrative agreements made under shady circumstances during Congo's recent transition period.

Kabwelulu's commission will recommend modifications to deals that are unfair to the state. The government will then discuss possible changes with the companies concerned. No contracts will be annulled.

He said companies must submit all documents relating to their deals by Wednesday. Any breach of his instructions will be considered an "economic crime" and incur "severe punishment".

Congo's first democratic government in four decades hopes its mining sector will power the war-torn country's renewal. Two civil wars left four million people dead between 1996 and 2003.
Congo Reopens Border for Export of Copper, Cobalt Ore to Zambia - Bloomberg - 22 mar. 07
March 21 (Bloomberg) -- The Democratic Republic of Congo authorized more than 400 copper and cobalt-laden trucks to cross into Zambia, after earlier blocking exports of unrefined ore.

Moise Katumbi, the governor of Congo's Katanga province, gave orders on March 3 to stop exports of the raw material to neighboring Zambia, as the country tries to halt an illegal trade that costs it $1.5 billion annually.

Chililabombwe District Commissioner Timothy Musonda said the truck drivers were released after being detained by Congolese authorities for demonstrating against the delay.

A 10th of the world's copper reserves and a third of its cobalt reserves are found in the central African nation. Congo's first democratic government in four decades is trying to rebuild an economy shattered by a five-year long civil war, which ended in 2003 leaving 4 million dead.

Metorex Ltd. Manager Grant Dempsey said the company's trucks carrying copper concentrate, a raw material processed by smelters, had started moving through the border as they travel to the company's Kabwe site in Zambia for refining.

Metorex, a South African metals producer, said today that it plans to construct a $180 million plant in the Congo to refine copper. Production at the plant will start in January.

``We're quite confident we'll be given leeway till the plant is operational,'' Dempsey said.
Congo-Kinshasa: African Diamonds Acquires Shares for Exploration in DRC
Business in Africa (Johannesburg)
March 12, 2007
African Diamonds plc, the AIM and Botswana-listed diamond explorer, has acquired a 35.42 percent share in Bugeco S.A., a private Belgian company and with it, the right to appoint a director. The total consideration paid was $1,616,420 in cash.
The key asset of Bugeco is a joint venture with De Beers on 21 licenses in the Democratic Republic of the Congo (DRC), covering 807 000 hectares of prospective diamondiferous ground. Initial exploration has discovered several new kimberlites, in an area where alluvial diamonds are already in evidence. Analysis indicates the presence of microdiamonds in several of the newly discovered kimberlites.
The DRC is a recognized multi resource country that is experiencing a surge of mining investment and is currently host to many multi national corporations for both exploration and production including, Phelps Dodge, Anglo Gold and BHP Billiton. Historically the DRC was one of the largest diamond producers in the world and may well regain that position in the coming years as it has acknowledged diamond potential.
Since the start of exploration under the Bugeco De Beers JV, over an original license area of 18 000 sq km. comprehensive exploration has identified priority areas which allowed relinquishment of ground of little importance for kimberlites. Significant progress has been made in prospecting the remaining high interest ground:
Several new kimberlites have been discovered to date in what appears to be two new kimberlite clusters.
Reconnaissance magnetic and detailed airborne magnetic (DAF) geophysical surveys have been completed over the entire license area and ground magnetic, gravity and electromagnetic surveys over specific anomalies have resulted in the identification of new drill targets.
Extensive ground sampling using helicopter and vehicle access is ongoing.
The 2007 work programme will focus on further discovery drilling and delineation. This work will prioritise bulk sampling.
Chairman of African Diamonds, John Teeling said that "this is a rare opportunity to take a stake in a highly prospective diamond play where new diamond-bearing kimberlites have already been found and more discoveries are expected. Aside from Botswana, where African Diamonds is a significant player, the DRC is one of the most prospective diamond areas in the world; Kasai is a province long renowned for its diamond resources.
"The combination of the excellent operational staff, our successful De Beers JV experience in Botswana, intimate in-country knowledge through Bugeco and the very attractive geological prospects make this an ideal fit for African Diamonds."
DRC warns mining companies
THE Democratic Republic of Congo's government will revoke companies' right to mine properties if they fail to meet state deadlines, Moise Katumbi, the governor of the mineral-rich Katanga province, said on Friday.

"Those people that don't honor their promises, we are going to take them - mining permits - back," KatumbI said.

The Katanga province generates an estimated 70% of the DRC's economy. It contains most of the country's base metals wealth.

Katumbi's comments follow a dispute between South Africa's Exxaro Resources and Canada's First Quantum Minerals and Gecamines, the DRC's state-owned mining company.
Exxaro and First Quantum are suing the DRC government after losing the right to mine the Kipushi zinc mine in Katanga province. The project has been put out to international tender and a winner is expected to be announced soon.

Katumbi said Gecamines had over five years attempted to contact Exxaro and First Quantum. "Now the price of zinc is high, they want to develop the mine."
"They are criminals, these people," says Katumbi. "How many times Gecamines tried to contact them?"

Exxaro CEO Con Fauconnier said he was philosophical regarding a dispute with Gecamines. “If we can’t do business on our terms, we’ll take our money elsewhere,” he said on Thursday.

Exxaro Resources and its joint venture partner, Canada’s First Quantum Minerals, claim to have an agreement to develop Kipushi. Exxaro also has a claim to develop another mine known as Kamoto. Both agreements date from the 1990s.

However, Paul Fortin, CEO of Gecamines, said in an interview with Miningmx on February 10 he was convinced by legal advice claiming no such agreement existed. “I will see them in court,” he said.

Kipushi, is estimated by Bloomberg News to contain 16.9 million tonnes of ore containing 2.8 million tonnes of zinc and a further 392,755 tonnes of copper. Bloomberg News said the ore was worth $11bn according to metal prices on February 13.
Congo government rejects firing of Gecamines CEO
Reuters - 02 mar. 07 - 15.46h
KINSHASA, March 2 (Reuters) - Democratic Republic of Congo's new government refused to accept the dismissal of the head of state-owned copper and cobalt mining company Gecamines on Friday, a day after the decision provoked protests by employees.

French engineering consultancy SOFRECO, which was brought in by Congo's government and the World Bank to help salvage the struggling firm, dismissed Canadian Paul Fortin on Wednesday.

Hundreds of employees stopped work on Thursday and picketed Gecamines' headquarters in Lubumbashi, the capital of the mineral-rich Katanga province, calling for Fortin to be reinstated.

Victor Kasongo, Congo's newly-appointed deputy minister of mines, told Reuters the government rejected the decision.

"The government still considers Paul Fortin the head of Gecamines. SOFECO took a decision on its own. That goes against the terms of the agreement of the World Bank," he said.

Though Fortin was recruited for the Gecamines CEO job by the French firm, his appointment required a special order by President Joseph Kabila. Kasongo said that means his dismissal needed the approval of the president and the mines minister.

SOFECO officials could not be immediately reached.

Gilbert Kankela, Fortin's assistant, said SOFECO alleged the Gecamines CEO had not fulfilled his obligations to them.

Kankela said employees were back at work on Friday and mining production had not been affected by the strike.

In an effort to shake up the loss-making and debt-laden company, Fortin unveiled plans to more than double production and even launch a possible share listing. He also warned he would cancel inactive partnerships with foreign firms.

Last year, Gecamines launched a tender for partners on the Kipushi mine, dismissing threats of legal action from South Africa's Kumba resources (KMBJ.J: Quote, Profile , Research) and Canada's First Quantum (FM.TO: Quote, Profile , Research) which claimed they had signed a partnership deal. Fortin denied this.

Gecamines, Congo's largest state-owned mining company, once accounted for the majority of the central African state's exports but is now barely functioning.

After decades of mismanagement and years of political turmoil and armed conflict, the company produced around 17,000 tonnes of copper in 2005, compared to 440,000 tonnes in 1989.

Much of Gecamines' mining infrastructure is currently in ruins and its debt currently stands at $2.4 billion. However, a World Bank-backed plan to save the company has succeeded in bringing in new investors.

In December, Phelps-Dodge (PD.N: Quote, Profile , Research) announced it planned to go ahead with development of its Tenke Fungureme concession in Katanga, on the same day Kabila took office as Congo's first democratically elected president in more than four decades.

Tenke Fungurume is considered to be one of the largest, highest grade, undeveloped copper/cobalt concessions in the world. And the mining giant has conditionally agreed to sink an initial $650 million into the project, which is expected to be at full production in two years.

Other foreign miners such as Canada's First Quantum (FQM.L: Quote, Profile , Research)(FM.TO: Quote, Profile , Research), Nikanor Plc (NKR.L: Quote, Profile , Research) and Katanga Mining (KAT.TO: Quote, Profile , Research) are also investing hundreds of millions of dollars.

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