expect something similar for sdl

http://www.mining-journal.com/Breaking_News.aspx?breaking_news_article_id=4594

China Railway to fund US$2.9 billion DRC mining project

China Railway Group plans to invest US$2.9 billion in a DRC copper and cobalt mining project
China Railway Group plans to set up a joint venture to invest in a US$2.9 billion copper and cobalt mining project in the Democratic Republic of the Congo.

China, stepping up its investment drive in Africa, is pursuing new infrastructure deals in the continent, especially in resource-rich countries, with the signing of multi-billion dollar accords that give Chinese companies major mining rights.

China Railway Group would be responsible for providing loans and other financing amounting to US$1.8 billion, including US$550 million in zero interest loans, for the project, it said in a filing with the Shanghai stock exchange on Wednesday .

The company also plans to fund more than 40% of the first phrase of infrastructure construction related to the project, which is estimated to cost up to US$3 billion. The investment requires approval from authorities in China and Congo, it said.

China Railway would own 43% and Sinohydro Corp 25% of the joint venture, Sino-Congo Mining SARL or Socomin, which would have a registered capital of US$100 million. State-owned Gecamines and Gilbert Kalamba Banika, identified only as a Congolese citizen, would hold the remaining 32%.

The Congolese government has promised to supply no less than 10Mt of copper in addition to cobalt associated with the copper production from the project to the Chinese parties involved in the venture. The project has a proven copper reserve of 6.8Mt and cobalt reserve of 420,000t, it said.

The DRC is host to 10% of the world`s copper reserves, and a third of the world`s cobalt.

Chinese Railway Group said it would use its own funds to invest in the project.

China Railway raised US$5.5 billion in a dual Shanghai and Hong Kong listing late last year, attracting strong investor interest as it benefits from massive infrastructure spending in China and expansion overseas.

The company`s Hong Kong-listed shares were up nearly 2% on Wednesday, outpacing a 0.9% gain on the benchmark index

The mining concessions China is getting in return will help guarantee its industrial companies a stable supply of key energy and mineral resources, in order to meet the huge appetite of the world`s fastest-growing major economy.

International prices of copper, seen as a key industrial metal, have surged nearly 30% in 2008, while international prices of cobalt hit a record high in March.

Rising commodities prices, partly due to global inflation, increased Chinese consumption and mounting costs, have been pushing the world`s top metals consumer to find alternative sourcing countries in Africa, where it has built up a friendly relationship since the Mao Zedong era.

The Chinese partners will pay a US$530 million "entry fee" under the terms of the agreement, while Congo will offer tax holidays.

China will pump US$9 billion into Congo`s war-ravaged mines and infrastructure in a partnership signed early this year that could propel the African country`s growth into double digits, a Congo government minister has said. As part of the agreement, it will refurbish power plants, hospitals, and roads.

Late last year, Chinese policy banks agreed to provide hefty loans for infrastructure to support the country`s mining industry. In return China was granted rights to copper and cobalt reserves said to be worth US$14 billion.

Socomin will primarily invest in new mines, near Likasi in the southeastern part of the country.

(Reuters, April 23)