GECAMINES, the Democratic Republic of Congo’s state-owned mining company, could block exports of cobalt and copper from the Tenke Fungurume mine following a dispute with its joint venture partner, China’s CMOC Group.
Bloomberg News cited Gecamines’ deputy CEO Leon Mwine Kabiena as saying that a commercial agreement between the sides had not been renewed therefore exports of minerals from the mine were technically illegal.
Gecamines claims that it is owed about $7.5bn by CMOC consisting of $5bn in royalties and the balance in interest. Tenke Fugurume’s reserves had been understated which was helping CMOC avoid having to pay out more as required in their commercial agreement, according to Gecamines which owns 20% of the mine.
CMOC denies the allegations “strongly” and opposes unjustified attacks, Bloomberg reported. However, Gecamines is considering cancelling the joint venture which would put the future of valuable mineral exports from the mine in jeopardy, said the newswire.
“If we determine that it’s not working, even in marriages, there are always divorces,” said Mwine in an interview at Gecamines’ headquarters in Lubumbashi, the DRC mining hub. “It’s the biggest rip off of the last twenty yeras, and Gecamines is not going to continue like this,” he said.
“There are people who ignore the basic facts and act against the established agreement, trying to sabotage the amicable environment of friendly talks by telling lies, making troubles, and attacking partners,” Bloomberg News cited CMOC of saying in an emailed response. “This is not justified. CMOC opposes it strongly. We will retain all means, including legal means, to defend our legitimate rights and interests.”
CMOC bought control of Tenke Fungurume Mining Sarl from Freeport McMoRan about five years ago for more than $3bn, said Bloomberg News. CMOC then injected about $2.5bn doubling the mine’s production which has raised questions from Gecamines and the government about whether it was under-reporting its reserves, the newswire said.