The latest short positions report:5588906 1032021 Largest...

The latest short positions report:

5588906
1032021
Largest increase in short position

TSX down 420.51 points. Anvil down to $4.46. Copper down to $3.09.


UPDATE 2-Congo extends mines contract review to Oct. 15
Fri Sep 26,
By Joe Bavier
KINSHASA, Sept 26 (Reuters) - Democratic Republic of Congo is extending a review of mining contracts by two weeks to Oct. 15, but expects no extra delays to the process from Thursday's resignation of the prime minister, an official said on Friday.

Prime Minister Antoine Gizenga, who turns 83 next month, announced his resignation on Thursday on health grounds. His departure followed criticism that he was failing to revive the war-ravaged economy and end conflict in the east.
President Joseph Kabila is expected to name a new prime minister, leading to the appointment of a new cabinet.
The mines contract review, which started last year, covers 61 contracts signed with mining firms including majors such as Freeport-McMoRan and AngloGold Ashanti The government had said it would finish on Sept. 30.

"It's likely we will extend the negotiations a bit ... We think we will be finished around the 15th of October," Deputy Mines Minister Victor Kasongo told Reuters, speaking by telephone from South Africa.

Under the mines review, some companies who have signed deals in the copper, tin and cobalt-rich central African country may have to cede much greater ownership to state miner Gecamines.

"Gecamines has asked for more time (to complete contract review negotiations)," Kasongo said.

He said the delay had nothing to do with Gizenga's resignation or the subsequent expected naming of a new premier and cabinet. "The contract review will go forward, whatever decision is made," Kasongo said.

"We still have the same president, the (new) cabinet (to be) put in place will accept the negotiations," he added.
Firms whose contracts are not approved under the review will be able to renegotiate terms with the government.
Of the 61 contracts, 14 are classed as "green," meaning acceptable, 26 are "orange" which require agreement on some points, and 21 are "red" which face cancellation.
The Tenke Fungurume project, described as one of the world's richest unexploited copper and cobalt resources and due to begin commercial production in 2009-10, is one of those earmarked under the review to have greater Congolese state participation.

Freeport is the majority owner of Tenke. Congo state mining firm Gecamines owns 12.5 percent of the project, and the state itself a smaller percentage, while Freeport owns 58 percent and Lundin Mining 25 percent.
Congo was a major producer of industrial metals before its infrastructure was ruined by decades of misrule by late dictator Mobuto Seke Soko, and a 1998-2003 war.
As metals prices have risen in the past five years, it has become a popular destination for mining firms, attracted by the country's rich mineral deposits, and forecasts that demand for metals, especially from China, will remain strong for years.

Resignation of Congo PM a worry for miners
Mining contracts being reviewed
Peter Koven, Financial Post Friday, September 26, 2008

The Prime Minister of the Democratic Republic of the Congo (DRC) quit his post yesterday, adding a layer of uncertainty for mining companies in the midst of the government's mining contract review.

The resignation of Prime Minister Antoine Gizenga was due to health reasons, according to reports. Mr. Gizenga, 82, helped rebuild the country after a long civil war.
A Cabinet shuffle in the DRC is widely expected to be the next step, and that could have a major impact on Canadian miners active in the region such as Katanga Mining Ltd., Anvil Mining Ltd. and Lundin Mining Corp.

They were thrown into turmoil last year when the DRC launched its infamous "contract review" to try and get more revenue for the state out of mining projects.
It is unclear whether a Cabinet shuffle would affect the review process for the better or worse for mining companies.
"If a cabinet shuffle occurs, for sure it would affect the posture and procedure on something like the contract review," said Paul Conibear, senior vice-president of projects at Lundin Mining.

Lundin is in a tenuous position, because the DRC seems to have a special interest in its giant Tenke Fungurume copper-cobalt project, a joint venture with Freeport-Mc- MoRan Copper &Gold Inc.

While the government appears to be negotiating reasonable terms with companies such as Katanga, an official said last month that the DRC wants to more than double its stake in Tenke from the current level of 17.5% and increase a transfer fee to $250-million. Those terms are considered much too punitive for the companies.

"I'm confident our deal will stand the test of time and be equitable," Mr. Conibear said, adding that Lundin remains committed to the country despite the problematic review.
The government hopes to complete the review by the end of the month.

Greg Barnes, an analyst at TD Newcrest, published a note speculating that a "worst-case scenario" for Lundin would be for its current 24.75% stake in Tenke Fungurume to be wound down to 16.5%.

Shares of Katanga and Anvil fell more than 7% yesterday, while Lundin and Freeport ended the day slightly higher.
Some industry sources downplayed the resignation, noting the real power is with President Joseph Kabila.