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Nikanor, Katanga deal in the offing Posted: Wed, 12 Sep 2007 [miningmx.com] -- CONGO base metals company, Nikanor, said it stood by earlier comments it was interested in consolidating mines in the country’s copper-rich Katanga province, and made a hypothetical case for merging with a neighbour. “We stick by our earlier comments. It's (consolidation) in our prospectus,” said Jonathan Leslie, executive chairman of Nikanor, of a statement to Miningmx in February in which it said it could buy up nearby operators. Leslie’s comments come amid speculation the way is clear for Nikanor to merge its operations with Katanga Mining, a company which recently attracted a $1.4bn bid from Central African Mining & Exploration (Camec). Anglo American was reported by London’s Sunday Times to have also expressed an interest in Katanga Mining. Anglo has declined to comment. Asked whether Nikanor was interested in Katanga Mining, Leslie said: “We can’t possibly comment on this. You can draw your own conclusions.” He however made a theoretical case for merging with a neighbouring company if there were synergies. “Whenever you build mining operations, you look for synergies. If you’ve got something next door that used to be part of the same operation, you would do it again,” said Leslie. “But this is very hypothetical.” Katanga Mining’s Kamoto mine and facilities, in which the Congo’s state-owned Gecamines has a 25% stake, used to part of a single state-owned operation with KOV, the series of open-cast pits Nikanor is spending $1.6bn to redevelop. In a report dated August 30, Mark Smith, an analyst with Renaissance Capital, said there was a possibility of corporate action between Nikanor and Katanga Mining following the failure of Central African Mining & Exploration (Camec) to buy the firm. “Go long Nikanor as the potential failed bid by Camec will likely focus the market on Katanga-Nikanor,” he said. KOV comprises four ore bodies and has a 172 million tonnes resource with an estimated contained metal content of nine million tonnes of copper and 800,000 tonnes of cobalt. Nikanor said in February it would consider buying other copper/cobalt producing mines in the Katanga region, the heart of the DRC's mining industry. "You never know what can happen in business - it might happen," said Simon Tuma-Waku, chairman of DCP, the Congolese company in which Nikanor has a 75% stake. Camec’s bid for Katanga was frustrated after the Congo government revoked its Mukondo concession. Camec had acquired a 22% stake in Katanga Mining and intended to buy another 7% before Katanga prevented the action. Camec shares shed a third after news of the revoked license. Click Here to subscribe to our daily newsletter
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