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REFILE-Congo state miner ditches plan to sell Glencore project
June 3, 2014 / 1:47 PM / 4 years ago

REFILE-Congo state miner ditches plan to sell Glencore project

(Refiles to remove Xstrata from Glencore company name in headline and lead)

KINSHASA, June 3 (Reuters) - Democratic Republic of Congo’s state mining firm Gecamines has shelved a plan to sell its 20 percent stake in the Kamoto Copper Company (KCC) mining project, which is controlled by Glencore PLC, Gecamines said on Tuesday.

Gecamines had considered selling its stake to Fleurette Group, a company controlled by Israeli billionaire Dan Gertler, which already holds shares in KCC and has snapped up a number of other major Congolese mining assets.

The proposed sale was to raise funds for other projects, Gecamines had said. However, in August Congo’s mining minister wrote a letter warning Gecamines against selling the country’s assets without government approval.

Gecamines Managing Director Ahmed Kalej said it was not selling the stake.

“It is a strategic decision. We are reevaluating the value of our share in the project. Future decisions will be made on a basis of the need for financing at that time,” he added.

KCC is situated in Congo’s copper-rich Katanga province. Last year Congo produced a record 942,000 metric tons of copper, helping to drive economic growth of 8.5 percent in 2013.

Gecamines has been trying to raise cash for new infrastructure and plants in order to ramp up its own production to about 100,000 tonnes by 2016.

Congo possesses enormous mineral wealth and has deposits of diamonds, gold, copper, tin and coltan, but decades of mismanagement, corruption and violence mean that the vast majority of its 65 million people live in poverty.

Gecamines has been criticized in the past by the International Monetary Fund for a lack of transparency in the sale of its mining assets following concerns that stakes in projects had been sold for considerably less than their market value. (Reporting By Peter Jones; Editing by David Lewis and Louise Heavens)

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