From the Financial Times, Chinese consolidation of the second...

From the Financial Times, Chinese consolidation of the second largest cobalt mine in DRC. Opportunities while the cobalt price is low.

Enjoy the weekend.

https://www.ft.com/content/68dcba4c-1b30-11e9-9e64-d150b3105d21

China Moly pays $1.1bn to strengthen control over giant Congo cobalt mine

Chinese miner China Molybdenum has strengthened its control over a giant copper and cobalt mine in the Congo, spending $1.14bn to buy out a 24 per cent stake held by a private equity company. The purchase of the stake from China-based BHR Partners will give China Moly an 80 per cent stake in the Tenke Fungurume mine. It gives China Moly greater control of the second largest source of cobalt in the world and comes as demand for the metal is set to rise due to its use in electric car batteries. The purchase will “increase the company’s say and control over the mine, and further enhance its profitability and ability to control risks,” it said in a statement to the Shanghai Stock Exchange. The Democratic Republic of Congo produces over 60 per cent of the world’s cobalt. But there is growing uncertainty about the outcome of its election this month, after data pointed to huge fraud in the first change of power since Joseph Kabila took over almost 18 years ago. China Moly bought a 54 per cent stake in the mine for $2.65bn from US copper miner Freeport-McMoran in 2016, as Freeport tried to reduce its $20bn debt load. A year later BHR paid $1.14bn for a 24 per cent stake in Tenke held by Canada’s Lundin Mining. Under an agreement with China Moly signed before the purchase, the miner had the exclusive right to buy back the shares from BHR. Congo’s state-owned miner Gecamines holds the remainer of the shares in the asset. Based in Luoyang city China Moly’s largest shareholders are Cathay Fortune Corp, an investment vehicle run by Chinese billionaire Yu Yong, and the local Luoyang state-owned mining company. Hong Kong-listed shares in China Moly have fallen by 48 per cent per cent over the past year. They rose by 4 per cent on Friday to trade at HK$3.