DRC's Gecamines to audit all JVs, revive exports
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- Categoría: Actualidad en inglés
- Publicado el Martes, 20 Septiembre 2011 06:01
Democratic Republic of Congo's State-owned mining company Gecamines will invest $930-million in a bid to re-establish itself as a major copper and cobalt producer, and will launch audits of its existing joint ventures to help raise the cash, the company said.
The plan could put Gecamines, a former mining heavyweight created by authoritarian leader Mobutu Sese Seko after independence in 1960, on a collision course with joint-venture partners such as Freeport McMoRan, Glencore-owned Katanga Mining and ENRC, over how much they are required to pay.
"All the terms of reference (of the audit) will be shown in a transparent manner to our partners," Albert Yuma, the president of the company's board of directors, told Reuters in an interview on Wednesday.
"All we want is to assure ourselves that Gecamines is getting all its dues in the execution of the joint venture contracts, and in the financing of investments and the sale of minerals," he said.
Gecamines, crippled by $1.6-billion of debt after years of corruption and mismanagement, aims to increase independent production and will not sign further partnership deals with foreign firms, Yuma said.
The company will invest $690-million in five years to modernise its equipment and to prospect for new mine sites, with the rest being used to restructure its liabilities and cutting its workforce, he said.
"The objective is to arrive, within 10 years, at a production of 150 000 to 160 000 t [of copper a year]," Yuma said, adding that last year the company produced about 18 000 t of copper.
Some of the cash will be raised through auditing its 30 existing joint ventures with international companies, who Yuma says have paid virtually nothing to Gecamines because they say they are operating at a loss or are not producing.
"I understand that the foreign partners have invested and must have time to recoup their investments. Of course that's true, but [in] that time, the longer it is, the closer Gecamines gets to dying," he said.
Yuma, appointed last year after the loss-making company's management was rejigged, said a tender has been opened to find an international firm to carry out the audit.
NEW MINES
Following the audit process, partners would also be asked to advance money on their estimated production profits to help fund the Gecamines investment drive, Yuma said.
Plans to slash the company's liabilities would see the government taking on around $1-billion of the debts, including those owed to other state companies.
Gecamines would then renegotiate its remaining liabilities with its creditors and banks, Yuma stated.
Gecamines was once one of Africa's largest mining companies, producing around 470 000 t of copper at its peak in the late 1980s.
Yuma believes prospecting for new mine sites is key to increasing production and that the company could hold deposits of 4 million tonnes, which need to be verified.
The company is spending $72-million on prospecting, focusing on the area between Kolwezi and Likasi, in Katanga province.
Any future discoveries will be operated solely by Gecamines, meaning more money will stay in Congo, Yuma said.
"If you take a snapshot of Gecamines the situation is worse than when the decision was taken to divide it up and distribute the mines to foreign partners...(joint ventures) are not good and they are not the future of Gecamines," he stated.
The company also aims to streamline by halving its workforce to 6 000 in the next three years and by withdrawing from all non-mining related activities.
Gecamines, will continue to sell stakes in its current joint ventures if they are deemed to be 'non strategic', Yuma said.
He also said the company, which was transformed into a private enterprise at the beginning of the year, is not bound by transparency regulations imposed by the World Bank and IMF.
Kinshasa, 16/09/2011 (Miningweekly / MCN, via mediacongo.net)
Denis Tougas
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By: Reuters
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