Bhp In Running For Congo Copper MinePublished by MAC on 2007-09-10
Source: Herald Sun ()
BHP in running for Congo copper mine
Felicity Williams, Herald Sun
10th September 2007
BHP Billiton is a "strong contender" to acquire Africa's third largest copper resource, according to British newspaper reports.
The world's biggest mining company is running a ruler over Canadian-owned Katanga, the majority owner of the Kolwezi copper-cobalt mine complex in the Democratic Republic of Congo, Britain's Sunday Times newspaper reported yesterday.
However, BHP Billiton was just one of the potential suitors eyeing Katanga, with fellow mining giant Anglo American emerging as the most likely buyer, the report said.
Camec, a London-listed miner that owns copper-cobalt assets in DR Congo, kicked off the battle for Katanga when it launched a pound stg. 720 million ($A1.7 billion) hostile bid for the company in August.
Katanga responded by inviting offers from other companies.
Camec was forced to withdraw its bid last week, after the DR Congo Government revoked its main mining licence in the country.
But Katanga has continued to pursue a potential sale, even though Camec's offer is no longer on the table.
BHP Billiton is seen as a strong contender to acquire Katanga, but Anglo American has now emerged as the most likely buyer.
Sources close to Swiss-based miner Xstrata believe the company is too busy with new projects in the Philippines, Peru and New Guinea to bid for Katanga, while Rio Tinto is currently occupied with its $US40 billion ($A48.87 billion) acquisition of Canadian aluminium producer Alcan, the report said.
Toronto-listed, London-based Katanga owns 75 per cent of the Kolwezi mine complex.
The DR Congo's state-owned mining company, Gecamines, holds the remaining 25 per cent.
The joint venture partners are currently conducting a four-year rehabilitation program at the Kolwezi complex, after it was allowed to flood in 1998 due to lack of funds.
The complex, in the Congolese copper belt about 300km from the country's second-biggest city, Lubumbashi, is set to ship its first copper in December and is expected to reach full production in 2011.
The mine site covers 15,000ha and Katanga says total reserves and resources stand at 200 million tonnes of ore with an average copper grade of 3.5 per cent.
Once fully operational, Kolwezi will produce 150,000 tonnes of copper and 8000 tonnes of cobalt a year.
Because exploration has not been carried out at the site since the early 1980s, there is also significant potential for new discoveries, according to Katanga.
The average cost of producing a pound of copper at the mine is US20, making it the world's sixth-lowest-cost copper producer, the company has calculated.
The mine complex has an estimated lifespan of 40-plus years.
In the 1980s DR Congo's copper output amounted to about 7 per cent of global production.
Since the early 1990s, however, DR Congo's copper production has gradually declined, amid widespread social and political unrest