risk that dea may fail on gecamines objections

Anvil Mining: Gecamines Demands New Mine Study
31 October 2011
Source:Dow Jones International News

SYDNEY (Dow Jones)--The C$1.33 billion cash bid for Africa-focused copper miner Anvil Mining Ltd. (AVM.AU) by Chinese mining investor Minmetals Resources Ltd. (1208.HK) may fail because of objections from the Democratic Republic of Congo's state-owned mining company Gecamines, Anvil said Monday.

Anvil said that Gecamines had queried whether it had upheld its contract over the Mutoshi project, a joint venture 30% owned by Gecamines.

MMR "have advised Anvil that (it) will not complete the previously announced offer...unless the prior consent of Gecamines is obtained on terms satisfactory to MMR", Anvil said in a statement.

"In the absence of a solution which does not result in any material amendments to the contractural agreements with Gecamines, there is a risk that MMR...may not complete the offer," the company said.


UPDATE 2-Congo says mining audit not a new review
6 October 2011
Source: Reuters News

* Congo assures no new mining review on the cards

* State firm Gecamines' audit plans 'quite normal', official says

* Investor confidence shaken by 2008-2010 contract renegotiations

By David Lewis and Jonny Hogg

LUBUMBASHI, Democratic Republic of Congo, Oct 6 (Reuters) - An audit by Democratic Republic of Congo's state mining firm of its joint venture partnerships should not be mistaken for a new mining contract review, the governor of Congo's minerals-rich Katanga province said on Thursday.

The central Africa state holds some of the world's largest reserves of cobalt, copper and other minerals but fears over contract security after a 2008-2010 mining review and rebel activity in the east have held back investment.

"There will be no further revisitation (of contracts). I have consulted with the president (Joseph Kabila)," Moise Katumbi told a mining conference in Katanga's capital of Lubumbashi.

"We went backwards on investment, and now we can not afford as a responsible government to have a second review. So do not stop your investments, you should continue to invest."

State firm Gecamines said it will launch an audit of existing joint venture deals in an effort to raise cash for a $930 million expansion -- a plan that could put it on a collision course with partners like Freeport McMoRanGlencore-owned Katanga Mining and ENRC .

Katumbi said the audit should not be confused with a full-blown contract review. "When you are in a partnership with someone, the partner has a right to request an audit. It is quite normal," he said.

Congo embarked on its controversial mining contract review process in 2008 in which more than 60 deals were renegotiated over two years and in which Canadian miner First Quantum Minerals was stripped of its $750 million KMT project. First Quantum is seeking international arbitration.

The review process shook investor confidence in the the central African state, which in 2011 placed 175th out of 183 countries in the World Bank's doing business rankings.

Ahmed Kalej Nkand, the director of Gecamines, said the amount of time it has taken for it to profit from its thirty partnerships had prompted it to audit the deals.

"This limited review aims to verify that the joint ventures are properly applying the agreements that created them," he told the mining conference.

Gecamines, saddled with about $1.5 billion in debt, is hoping that proceeds from the audit will help it to fund a $930 million expansion plan to re-establish itself as a major copper and cobalt producer.

The former mining heavyweight was created by authoritarian leader Mobutu Sese Seko after independence in 1960, and has suffered from years of corruption and mismanagement.

Gécamines will audit joint ventures as it looks to mobilise revenues
Claire Hack
30 September 2011
Source: Metal Bulletin

Democratic Republic of Congo state-owned mining company Gécamines will launch an audit of mining companies in which it is part of a joint venture as it looks to enhance revenues, ceo Kalej Nkand said in a statement.

The company will carry out a limited review of these joint ventures, of which there are over 30, from November to make sure they are correctly applying conventions binding them to it.

These audits are part of existing agreements made with Gécamines, and will cover management sectors including investments, production, and supply and provision services contracts.

The project is aimed at guaranteeing "a better revenue mobilisation" from investments for Gécamines, Nkand said in the statement.

He added that this is not a new review of mining partnerships, a process which mining companies concluded last year.

To ensure objectivity, an international tender was issued to select a partner to carry out the review according to international standards. The selection is expected to be finalised shortly.

Gécamines began a five-year programme to produce 100,000 tpy of copper this year.