KATANGA Mining will withhold payment of $250m for land it agreed to buy from Gecamines in the Democratic Republic of Congo (DRC’s) whilst executives at the state-owned firm were being investigated, said Reuters in a report.
Katanga’s subsidiary Kamoto Copper Company (KCC) agreed in December to buy land adjacent to its mine from Gecamines and said it would pay an initial tranche of $150m. Katanga Mining is a subsidiary of Glencore.
Katanga said in a statement that it had received an injunction order from Congolese prosecutors that prevented it from making payments until the investigation, which was announced in December, was concluded.
“KCC has provided notice to Gecamines that the order constitutes a force majeure under the agreement and that its obligations under the agreement are suspended,” Reuters quoted Katanga to have said. Katanga referred to a clause in contracts that allows certain terms to be ignored because of unavoidable circumstances.
Prosecutors in Congo are investigating a $219m line of credit issued to Gecamines by a company owned by Israeli billionaire Dan Gertler, who is under US sanctions.
Katanga also said it would also delay the commissioning of its acid plant to the second half of the year due to delays caused by the coronavirus outbreak. The previous target had been the first half of 2020.
KCC, which is 75%-owned by Katanga, produced 234,500 tons of copper and 17,100 tonnes of cobalt last year. It is an important growth project for Swiss-based Glencore, and the construction of a new acid plant would help cut costs at the operation.
